From periphery to core business: efficient solutions for complex carve-outs

Carve-outs are the ideal invest­ment focus for us, as they offer both major chal­lenges and enorm­ous oppor­tu­ni­ties. My foun­ding part­ner Dr. Daniel Ebert and I have over 35 years of combi­ned expe­ri­ence in acqui­si­tion, restruc­tu­ring and opera­tio­nal trans­for­ma­tion. During this time, we have seen time and again that dive­s­ted busi­nesses — if mana­ged correctly — can undergo impres­sive development. 

Deal flow is curr­ently parti­cu­larly strong. In econo­mic­ally uncer­tain times, many groups are under pres­sure to focus on their core busi­ness and divest non-stra­te­gic units. We see oursel­ves as problem solvers for groups by assum­ing risks, faci­li­ta­ting a clear cut and convin­cing through a prag­ma­tic tran­sac­tion process — from in-house due dili­gence to quick invest­ment decisions. 

Our approach differs from tradi­tio­nal private equity models as we closely link acqui­si­tion and opera­tio­nal trans­for­ma­tion. We call this our “A&O approach”: acqui­si­tion and operations. 

Right from the start, we work to provide the acqui­red compa­nies with a solid foun­da­tion for sustainable success. Our inter­nal task force team brings opera­tio­nal exper­tise to every step of the process — from the actual carve-out, to the opti­miza­tion of proces­ses, the deve­lo­p­ment of effi­ci­ent struc­tures and the streng­thening of the manage­ment team. — We have specia­li­zed in carve-outs because we know exactly what opera­tio­nal chal­lenges and oppor­tu­ni­ties lie in such a phase. With our prac­ti­cal and flexi­ble approach, we manage to lead these compa­nies to inde­pen­dence in an effi­ci­ent and targe­ted manner — and in a sustainable manner. 

Our aim is to enable the compa­nies to become inde­pen­dent and to make them compe­ti­tive in the long term. This is where we differ from tradi­tio­nal fund struc­tures: we have capi­tal from German entre­pre­neu­rial fami­lies who support us in the long term. This allows us to take our time to deve­lop compa­nies sustain­ably without being rest­ric­ted by fixed holding peri­ods or exit pres­sure. Our model also includes a signi­fi­cant co-invest­ment from our side for each indi­vi­dual deal. This not only makes us inde­pen­dent of exter­nal finan­cing, but also shows that we believe in the success of each indi­vi­dual company and use our own capital. 

In the long term, this gives us the flexi­bi­lity to design indi­vi­dual stra­te­gies. We are convin­ced that this inde­pen­dence is a decisive advan­tage that sets us apart from many other inves­tors in this area. 

About Uli Lorenz

More than 10 years in private equity with a focus on the acqui­si­tion of compa­nies in need of trans­for­ma­tion. Most recently Mana­ging Direc­tor at a pan-Euro­pean invest­ment company since its foun­da­tion. — Studied econo­mics at the Univer­sity of Passau, Univer­sity College of Dublin, Univer­sity of St. Gallen, then star­ted in invest­ment banking. 

u.lorenz@ecco-group.de