Target Information

Zephyr Group, a portfolio company of the Sustainable Development fund managed by DeA Capital Alternative Funds and VSL Club, recently completed the acquisition of 100% of Twinco (based in Singapore) and Carl Baguhn (with locations in Hamburg and Barranquilla). Zephyr Group specializes in the distribution of spare parts for maritime engines and power plants, solidifying its position in the market with this strategic acquisition.

Twinco, established in the early 1990s in Singapore, focuses on the distribution of spare parts and offers repair and maintenance services for marine and power plant engines, predominantly serving clients in Asia and the Far East. Carl Baguhn, founded over a century ago and based in Hamburg, Germany, is renowned for its diesel and gas engine services, providing both original and OEM spare parts. It also specializes in custom manufacturing of sliding bearings and on-site assistance and repairs for engine shafts and blocks, with an additional subsidiary in Barranquilla, Colombia, to better serve Latin American clients.

Industry Overview

The marine and energy sectors in Asia and Latin America are experiencing significant growth, driven by increasing investments in infrastructure and a rising demand for efficient energy solutions. Countries in these regions are enhancing their fleets and power generation capabilities, which propels the need for high-quality spare parts and maintenance services. This growing market landscape presents ample opportunities for companies like Zephyr Group to capitalize on.

Furthermore, the trend towards sustainable practices within these industries is becoming increasingly important. As companies adopt Environmental, Social, and Governance (ESG) standards, there is an escalation in demand for reliable partners that provide high-quality, responsible products and services. Zephyr Group's commitment to ESG principles positions it advantageously within both established and emerging markets.

In Latin America, particularly, the need for maintenance and repair services is rising as more businesses seek to optimize their operational efficiencies through reliable technical support. This burgeoning market is drawing international interest, presenting an ideal growth opportunity for Zephyr Group as it expands its service offerings in the region.

Rationale Behind the Deal

The acquisition of Twinco and Carl Baguhn enables Zephyr Group to enhance its presence as a leading independent distributor of spare parts and services for diesel and gas engines worldwide. This strategic move not only diversifies Zephyr's product portfolio but also facilitates access to new markets and customers, especially in Latin America and the Far East, where there is a burgeoning demand for such services.

Moreover, integrating these two established entities will allow Zephyr Group to benefit from significant synergies, improving operational efficiencies and fostering long-term sustainable growth in an ever-evolving economic landscape.

Investor Information

DeA Capital Alternative Funds, through its Sustainable Development fund, focuses on investing in small and medium-sized enterprises (SMEs) in Italy and prioritizes ESG themes. With a strong track record in private equity, DeA Capital plays a pivotal role in supporting the growth trajectories of its portfolio companies and promoting responsible investment practices.

Under the guidance of Giuliano Palazzo, Managing Director, and Andrea Valenti, Investment Director of DeA Capital Alternative Funds, the firm aims to amplify value for both its investors and its portfolio companies by fostering strategic partnerships and facilitating advantageous market positions.

View of Dealert

This acquisition appears to be a robust investment for Zephyr Group, enhancing its market leadership in the competitive marine and energy sectors. By incorporating Twinco and Carl Baguhn's established networks and reputations, Zephyr is well-positioned to leverage cross-selling opportunities and increase market share significantly.

Furthermore, the management team’s expansion reflects a strong commitment to driving growth and innovation within the company. The appointment of Marco Ficarra as General Manager will bring valuable expertise, potentially resulting in improved service delivery and operational efficiencies.

Ultimately, this deal could result in meaningful long-term benefits for all stakeholders involved—customers will enjoy enhanced service levels, while suppliers may benefit from a stronger partner in the market. Zephyr Group’s strategic initiatives, underpinned by a solid financial backing from DeA Capital, suggest a positive outlook for future performance.

In conclusion, the acquisition aligns with ongoing trends in sustainability while positioning Zephyr Group for substantial growth, establishing it as a more formidable competitor within the international landscape.

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