Business

German family investment group sets aside $2 billion to build portfolio

German family investment and holding company Haniel Group has confirmed plans to invest 1.6 billion euros ($1.9 billion) in building a larger portfolio of businesses following a restructuring. 

During 2020 it largely completed the sale of a 22.5% stake in Metro AG, the global Cash & Carry giant to CP Global Commerce, led by Czech investor Daniel Kretinsky.

This year it has started to acquire businesses including BauWatch, a specialist in temporary outdoor security.

Haniel has invested an additional 475 million euros in its existing portfolio. Its newly-published annual report has confirmed a 5% rise in gross revenue during the year to December to 3.1 billion euros, but a 5% drop in operating profits to 235 million euros following the pandemic. 

Costs relating to the discontinuation of Haniel’s ELG materials recycling business, now up for sale, pushed post-tax return into a loss of 96 million euros.

Haniel has 720 family members who can elect 30 representatives to its advisory board for five years. Four family members get elected to its supervisory board.

Franz Haniel has just stepped down as chairman of the supervisory board leaving its members Maximilien Schwaiger and Mathias Pahl to represent next gen.

The company has redefined its strategy to create value for future generations, as well as the broader environment. A family foundation is dedicated to the welfare of future generations.

  The business, formally known as Franz Haniel & Cie, was founded in Duisburg in 1756 by customs inspector, Jan Willem Noot. He started a packing house for groceries in Ruhrort, using a lease granted to him by Frederick II of Prussia.

The family developed into a trading business run by Noot’s daughter Aletta, widow to Jacob Haniel. She diversified into coal and iron smelting as the Industrial Revolution was getting underway. 

Her two sons, Gerhard and Franz developed Haniel’s coal, iron shipping and trading businesses across the Ruhr. 

The company suffered mixed fortunes during the two wars of the 20thCentury. Over time, it sold out of heavy industry and shipping, to get involved in recycling and pharmaceutical wholesaling.

Haniel went back to its trading roots in 1966 by buying into Metro inspired by its managing director, and wealth creator, the late Otto Beisheim. He retired in 1994, and his successors struggled to deal with his sprawling global legacy through retrenchment and restructuring.

In 2018, Haniel started to sell its shares in Metro to CP Global Commerce, a business owned by Daniel Kretinsky of the Czech Republic and Slovak investor Patrik Tkac. The company is now valued at 3.2 billion euros and Haniel retained a residual stake of 2.7% at the end of last year. 

The sale removed a massive distraction giving Haniel room to buy and nurture a portfolio of businesses.

Thomas Schmidt, previously at tech-driven engineer TE Connectivity was promoted to chief executive. Franz Haniel was succeeded by Doreen Nowotne, a private equity specialist previously at UBS Capital and BC Partners.

In making acquisitions, Haniel willingly backs smaller deals tabled by its affiliates so that it can build a stronger presence in a given niche. In pursuing deals Haniel uses a “people, planet, progress” mantra. It is open-minded on ownership structures, however.

On the synergy front, its Rovema business, which makes packaging machines, has just bought a company that renovates them.  Optimar makes automated fish processing facilities and recently bought BioMetrics which provide data to fish farmers. 

There can also be synergy between affiliates, as well as a shared operational model. This year’s purchase of 50% of Emma, offers access to mattress technology which aligns with BekaertDeslee a developer of mattress textiles.

It owns 50% of a business called Takkt which has a platform for the marketing of business equipment. CWC offers a digital rental service for fields like workwear and fire safety.

Haniel’s smaller growth investments include a company called Wandelbots which can train its robots into moving in a predetermined way at the stroke of a tracer pen. It participated in a 2020 funding round with Microsoft venture arm M12. 

Haniel has backed a vertical farming business called Infarm in a $170 million funding round also supported by Atomico and Israel’s Havaco. It has also invested in Gilde Healthcare, a diversified healthcare fund and, more recently, Happybrush, a sonic toothbrush venture raising 4 million euros.

 

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