In early 2005, private-equity firm Cerberus Capital Management acquired then insolvent Peguform, a German plastics supplier.
Peguform now has 6,500 employees worldwide and recorded revenue last year of 1.3 billion euros (about $1.73 billion at current exchange rates).
CEO Gerhard Boehm talked about the Cerberus acquisition with Automobilwoche Staff Reporter Klaus-Dieter Floerecke at Peguform's headquarters near Freiburg in southern Germany.
How has Peguform been doing since its acquisition by Cerberus?
The company is cash-positive, and we are financing our projects on our own. Previously, we had a strategic investor with a venture group that pulled money out of the company. In this light, we chose our new investor well.
What would have happened if Cerberus had not taken a stake ?
During the insolvency, there were discussions about the breakup of the company. That certainly would have been the end of the firm in its current form.
How did the automakers react?
During the insolvency, they had helped finance the continuation of the company with loans. Even as early as this period, they decided to do all they could to avoid a breakup of Peguform.
Why was Cerberus agreed upon?
Cerberus is known in the market as an investor that acquires companies in crisis and then repositions them. The investor's interest has been so sustained that automakers backed the investment. Nobody could have bought Peguform without the customers' assent in advance.
But automakers usually don't view equity investors all that favorably.
It was nonetheless the case that the automakers supporting us during the insolvency made the decision for Cerberus in the end, along with the insolvency administrator.
What did Cerberus do first?
They realigned management. In addition, we introduced the Toyota Production System and trained our workers on quality issues. In the first year alone, about 10 million euros (about $13.2 million) was spent on this.
So you don't object to having an equity investor as an owner?
No. Private equity has established itself as a form of financing in Germany. One reason is the fact that banks have left industry in the lurch, to some extent. I have to say this clearly: Without private equity, a great many companies wouldn't be around today.
You may e-mail Klaus-Dieter Floerecke at [email protected]