Chinese group 'to buy KraussMaffei', say reports

An undisclosed Chinese machinery group is poised to buy moulding machine manufacturer KraussMaffei Group from owners Madison Capital Partners, a Chicago-based investment firm, according to Reuters.

The news agency cited “two people close to the transaction” but who were not identified in a story filed yesterday.

Reuters did not name the possible Chinese buyer, but listed three Chinese companies that had been “initially interested” but which were no longer in talks with Madison Capital: major plastics machinery players Haitian International Holdings; Chen Hsong Holdings and a third company, called Long Hong.

Munich-based KraussMaffei Group employs 4,000 people worldwide and generated record order income of €1.1bn (£881m) for its fiscal year 2010-2011. Financial results are not available for the current fiscal year.

Reuters reported that Madison Capital hopes to get as much as €700m (£561m) for business, the same figure Bloomberg reported in a story three months ago.

Madison Capital, which said it had retained Goldman Sachs as its advisor, bought KraussMaffei – the world’s largest manufacturer of plastics equipment – in 2006.

In private equity circles six years’ ownership is a long time, prompting some industry observers to wonder when Madison Capital would cash in its investment and sell the business to pay back investors. Machinery sales are rebounding from the recession and capital is said to be freeing up for deals.

Contacted about the Reuters report, KraussMaffei spokesman Imre Szerdahelyi said company officials “don’t comment on rumours.”

KraussMaffei and Madison Capital officials also have declined to comment on past reports.

A German financial newspaper reported in 2008 that Madison Capital was preparing KraussMaffei Group for an initial public offering. In June this year, Bloomberg reported that Madison Capital was exploring the sale of KraussMaffei Group, again citing undisclosed sources.

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