Target Company Overview

Deutsche Private Equity (DPE) has divested its stake in Elatec to SGT Capital, in partnership with Summit Partners. Elatec is a leading international developer and provider of secure physical and digital access solutions. Since DPE's investment in 2016, Elatec has significantly expanded its operations, nearly doubling its revenue and employee count within just two years. The company has strengthened its market leadership in Europe, enhanced its presence in the U.S., and established a growth base in Asia, particularly in China and Japan.

Currently, Elatec employs over 150 staff globally and supports more than 60 RFID card technologies, as well as BLE and NFC protocols. Its products are certified in 110 countries and offer end-to-end encryption, addressing a growing demand for enhanced physical cybersecurity solutions.

Industry Overview

The access solutions industry is experiencing robust growth, driven by increasing cybersecurity threats and the necessity for secure access in both physical and digital environments. The demand for innovative technologies that provide secure access is escalating as businesses and organizations seek to protect sensitive data and resources.

In Germany, where Elatec is headquartered, the access control market has shown remarkable resilience and adaptability, fueled by the increasing digitization of business processes and the rise in remote working trends. Companies are investing more in security solutions to safeguard their assets, leading to a growing market for advanced access technologies.

Furthermore, awareness of the need for integrated systems that combine physical and digital access is on the rise. The explosive growth of smart devices and the Internet of Things (IoT) has necessitated more sophisticated solutions that can accommodate a variety of access methods and provide a seamless user experience.

Overall, the future looks promising for the access solutions industry, particularly for companies like Elatec that are positioned to capitalize on these trends by delivering state-of-the-art technologies that meet the evolving needs of businesses globally.

Rationale Behind the Deal

The divestiture of Elatec by DPE comes as a strategic move to facilitate accelerated international expansion under the stewardship of SGT Capital. By partnering with SGT, a firm known for its commitment to supporting mid-sized, market-leading companies, Elatec aims to enhance its growth trajectory and capture additional market share across various regions.

This deal not only positions Elatec to address the rising demand for secure access solutions but also underscores the company's adaptability in responding to market needs. With SGT Capital's backing, Elatec can now focus on expanding its innovations in electric mobility, smart business, smart office, and smart city sectors.

Investor Information

SGT Capital is a global private equity firm focused on investing in mid-sized companies that are industry leaders in their respective markets. The firm specializes in working closely with existing management teams to support their ambitions for growth and international expansion. SGT's strategic insights, combined with its extensive network, enable it to provide valuable resources and guidance to companies it invests in.

By acquiring a stake in Elatec, SGT Capital is making a strategic investment in a company poised for significant growth in an essential industry. Through its partnership, SGT not only gains access to Elatec's innovative technology but also to its established customer base and global reach.

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The investment by SGT Capital in Elatec is likely to be a prudent decision given the increasing importance of cybersecurity and secure access solutions in today’s digital landscape. With the ongoing advancements in technology, companies that provide secure access solutions will continue to see robust demand.

Moreover, SGT Capital’s expertise in fostering growth in mid-sized companies will be instrumental in scaling Elatec's operations and expanding its product offerings. This partnership has the potential to accelerate innovation and position Elatec as a leader in the evolving market of access solutions.

Given Elatec's track record under DPE and its subsequent growth with Summit Partners, the company possesses a solid foundation to leverage. SGT's involvement will likely amplify this momentum and align Elatec with emerging trends in the smart technology sectors.

Overall, this investment appears to hold significant promise, potentially accelerating Elatec's growth trajectory while enhancing its capabilities to meet the increasing market demands for security solutions.

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