Key Takeaways
- • Advent International and Cinven completed the acquisition of thyssenkrupp's Elevator Technology business for €17.2 billion ($18.7 billion), marking the largest European private equity buyout since 2007 and one of the most complex industrial carve-outs on record.
- • thyssenkrupp Elevator generated approximately €8.0 billion in revenues in FY 2018/19, operates across more than 1,000 locations in over 100 countries, and provides elevators, escalators, and passenger transportation solutions globally.
- • thyssenkrupp AG retained a substantial minority stake in the newly independent business, signaling management confidence in value creation potential and demonstrating commitment to Germany-based operations and employees.
- • The business demonstrated significant resilience during the COVID-19 period, supported by high levels of long-term contracted service revenues and strong cash flow generation—key attributes that attracted the consortium of buyers.
- • The transaction included participation from Germany's RAG foundation alongside Advent and Cinven, with Kirkland & Ellis providing legal advisory to the bidding consortium.
Summary
Advent International and Cinven have successfully closed the acquisition of thyssenkrupp AG's Elevator Technology division in a €17.2 billion transaction completed in July 2020. The deal represents the largest European private equity buyout since the 2007 financial crisis and ranks among the most complex industrial carve-outs executed in the sector. The consortium also included Germany's RAG foundation as a co-investor.
thyssenkrupp Elevator operates as a leading global provider of elevators, escalators, and innovative passenger transportation solutions, serving customers across more than 100 countries from over 1,000 operational locations. In the 2018/19 financial year, the business generated approximately €8.0 billion in revenue. The scale and geographic diversity of the platform, combined with its diversified customer base, positioned it as an attractive acquisition target for institutional investors.
A critical factor distinguishing this asset from typical leveraged buyout targets is its business model foundation: the company derives substantial revenue from long-term, multi-year service and maintenance contracts. This contractual revenue base provided significant downside protection during the COVID-19 period, enabling the business to demonstrate resilience and stable cash flow generation despite macroeconomic uncertainty. Bruno Schick, Partner and Head of DACH and Emerging Europe at Cinven, emphasized this resilience, noting the "predictable profit streams and cash flows from multi-year service contracts" and the business's proven ability to weather difficult market conditions.
Notably, thyssenkrupp AG elected to reinvest in the newly independent entity by acquiring a substantial minority stake post-transaction. This decision underscores both the seller's confidence in the value creation thesis and its commitment to maintaining ties with a business that remains integral to Germany's industrial base. The Consortium's stated strategy focuses on organic growth investments and bolt-on acquisitions, leveraging the platform's market position and cash generation to build scale in the global urban mobility sector.
thyssenkrupp Elevator operates as a leading global provider of elevators, escalators, and innovative passenger transportation solutions, serving customers across more than 100 countries from over 1,000 operational locations. In the 2018/19 financial year, the business generated approximately €8.0 billion in revenue. The scale and geographic diversity of the platform, combined with its diversified customer base, positioned it as an attractive acquisition target for institutional investors.
A critical factor distinguishing this asset from typical leveraged buyout targets is its business model foundation: the company derives substantial revenue from long-term, multi-year service and maintenance contracts. This contractual revenue base provided significant downside protection during the COVID-19 period, enabling the business to demonstrate resilience and stable cash flow generation despite macroeconomic uncertainty. Bruno Schick, Partner and Head of DACH and Emerging Europe at Cinven, emphasized this resilience, noting the "predictable profit streams and cash flows from multi-year service contracts" and the business's proven ability to weather difficult market conditions.
Notably, thyssenkrupp AG elected to reinvest in the newly independent entity by acquiring a substantial minority stake post-transaction. This decision underscores both the seller's confidence in the value creation thesis and its commitment to maintaining ties with a business that remains integral to Germany's industrial base. The Consortium's stated strategy focuses on organic growth investments and bolt-on acquisitions, leveraging the platform's market position and cash generation to build scale in the global urban mobility sector.
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