A too enticing offer to say no to
“It was a win-win situation. We wouldn’t have got such a good price if we had sold it this year”, Lutz Stache (photo) commented on the sale of Simcor Holding to Macon Deva , held by Polish-based buyout firm Enterprise Investors. The deal brought him 50 million euros of a total 53 million euros. The remaining 3 million went to his partner Mihai Voiculescu who reinvested the money in real estate.
Stache said that 12 years ago when Simcor was acquired, the company had been on the brink of bankruptcy. Throughout this time, he pumped over 15 million euros in the company to retool it and to make it profitable again. “I’ve always reinvested the profit and it proved to be a good strategy”, said the businessmen, adding that he considered four takeover bids before selling to Macon. The bid from Macon was “much too enticing” for Stache to refuse.
“It was the right time to sell, just before the financial crisis took hold”, said Valentin Tarus, founder of Remedia drug company, about his new business partner. Lutz Stache started to buy stock in Remedia since the beginning of the year. Now he holds no less than 23% equity position in the drug retailer. Together with Tarus, who holds the majority stake, the German businessman said he would invest one million euro in an online pharmacy project that could be put in place by year-end.
Money steered back to Romania
His largest investments in Romania are steered to the lime plant bought in May from the steel company Arcelor Mittal Galati. Three months ago, Lutz Stache acquired through AHG Simcor Industry, the fully-owned subsidiary of the German-based Simcor, the lime plant from Arcelor Mittal.
Until the completion of the new facility from Galati, scheduled for 2011, Lutz said he would invest an eyebrow-raising 40 million euros. Once fully operational, the facility will put out up to 400,000 tons of lime. The business would generate sales of 35-40 million euros, five times more than now. The facility’s total lime production is sold exclusively to Mittal Steel to be used in the steel-purifying process. “I am looking for new clients, I am interested in any profit-making opportunity”, he said.
AHG Industry, whose sole shareholder is Lutz Stache, runs construction material operation in other countries such as Poland, Turkey, United Arab Emirates, Iraq and China. Last year, the company had sales of 700 million euros and a headcount of 10,000. “There is money and profit in any country. In some of the countries we operate, we have a profit margin of 20%, for example Iraq or China. But I am more than satisfied with the performance of the business in Romania”, he added.
For this year, Stache expects a “slight” increase of 10 million euros to the 700 million euro sales, given the completion of investments in the pipeline and how the market performs under the grip of the financial crisis effects. “Even in recessionary times, I have to continue investing money, and achieve my objectives”, said the owner of AHG Industry.
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