184. Mutares im Interview – mit CIO Johannes Laumann - Der Anleger Podcast

Hello together.

Yes, very gladly. So we are a holding company founded in 2008 and we specialize in acquisitions that essentially emerge from spin-offs from corporations, that are not performing as the corporation imagined, that are essentially negative. And we take a problem off the corporation's or the seller's hands. That's how we see ourselves, as problem solvers. And what we do is we look for companies and say we want to buy companies where we can operationally bring them back to the winning track, to the profit track. We want to buy companies that have a sustainable business model that will last, and we want to buy companies that we can eventually sell again. And these are essentially the three main points how we look at acquisitions. And in cooperation with the seller, we can go into more detail later, we structure the transaction and then sell it again at some point. So we are not someone who invests evergreen, but we are buyers and sellers with a holding period of around 3, 4, 5 years.

Mhm. So the competitive situation in our transactions, perhaps we need to take a case example briefly to explain a transaction. So we made a transaction, for example, I think the most well-known in Germany is Magirus. We are in 42 countries, but I think the listening audience is more German or DACH region. We acquired Magirus from Iveco, a fire truck and defense manufacturer that was loss-making. So we made an agreement with Iveco, paid a nominal purchase price, but said this is our plan. We want to bring Magirus forward again, make it profitable and set it up, and this transaction or this making profitable we told Iveco, you have to pay for it. Yes, we do it, but you have to pay for it. Accordingly, Iveco left money in the cash register, left assets in the cash register that we could use to pay for this restructuring. Magirus is today break-even or positive and has good chances to continue growing in the market. So that's the standpoint of the transaction, how a typical transaction works. So we ask the seller to give us a strong balance sheet for a nominal purchase price, consisting of either fixed assets, inventories, receivables, or cash. Mhm. And accordingly, the competitive situation is shaped. Our biggest competitor I always see in the seller itself, because the seller in the example, for instance Iveco, naturally asks itself, do I now have to give Laumann and Mutares many millions of assets for free, so to speak, to get rid of a loss-making company, or can I do it myself with these assets? Yes, why can Mutares do it better than I can? And accordingly, I always see the seller as our biggest competitor. There are of course locally and globally one or another that we occasionally see on transactions. Yes, who pursues the same interest. But my biggest competitor is actually the seller.

We always look at both opportunistically. So essentially the companies are oriented towards selling to a strategist, who then further develops the company, integrates it, and so on. Yes, because where are we good as Mutares? We are good as Mutares at those who extract companies from complex corporate structures and make them independent, basically run them as medium-sized companies. We as Mutares are good at, besides extracting, making a loss-making company profitable relatively quickly, and we as Mutares are good at growing the company relatively quickly inorganically, because we also represent the M&A side in transactions. Where we are very mediocre and what is not our task in the business model is to say, we will now develop a 10-year strategy for the company with growth in new markets, with growth in new countries. We invest 30 million euros and have a return in 6, 7 years. That's not us. We don't have that long-term perspective. We have a very strong short-term perspective and a medium-term perspective. So accordingly, we first develop the company and then we come to the point where I decide whether to sell or not. And then the question is, does such a company suit an IPO, does such a company suit a strategic sale? And most of the time the answer is strategic sale. Yes, because either the company is complex or the market is not receptive. Especially the topic of IPOs is significantly different than it was in 2018, 2019, when you could basically go public with anything. And I think that is more selective today. We have done an IPO, we did an IPO with Steyr, we did an IPO with Terranor, we had an IPO planned in Finland. We are also considering an IPO with Magirus, which is also public. So an IPO is already a valid exit channel. But the majority of exits are still in the so-called trade sale to a strategist.

We are very opportunistic there, honestly. What is always important for us, besides the decision criteria I mentioned earlier, what the company must have, is that it has a value chain, because we come from an operational perspective. We have 150 consultants on our own payroll that we send into the companies. So we don't work externally with the usual suspects from Roland Berger, Boston Consulting, Alix Partners, Alvarez & Marsal, Porsche Consulting, but we do it ourselves with our people, and we need improvement potential. That means the deeper the value chain, the more starting points we have to bring about improvements. So that is our approach and it is important to us that this exists. Generally, it must be industries where we are in the jurisdictions. We are active in 14 countries, essentially all of Europe that you can think of, plus Japan, China, India, and the USA. We would probably not buy a company headquartered in South Africa or Argentina. Yes, we would not do that. So the jurisdiction must fit, the value chain must fit, the opportunity must fit, as I said before, you have to be able to sell it again. The product must be sustainable and viable, and then yes, that's how we select. And we have various segments where we are active differently. We have an automotive segment where we want to reduce the importance in our portfolio a bit. We are very active in the energy sector, we are very active in construction, where I believe the market will come back. We are very active in infrastructure, logistics, defense, B2B services, and especially in chemicals. We always buy into markets that few people want to touch. For example, we just made an exit to Hyundai Power Systems. We sold a heat exchanger business to them that we acquired from Siemens Energy. We made the deal with Siemens Energy in 2021. It is a heat exchanger business that works in combination with gas turbines. It is the world market leader in quality and efficiency. We negotiated in 2021 and closed the deal in 2022. With Steyr Motors, we started negotiating in 2022, which is probably a well-known IPO for the listeners. The Ukraine war had just started simmering. We always invest in situations at the time when no one wanted to look at them. We made a big chemical deal with Sabic, with Saudi Aramco, and we signed it in January, it will be closed now. The chemical industry is nothing that every investor cheers about currently. Now, of course, there is the special effect through the Strait of Hormuz, where oil prices are high and thus the chemical industry is smiling. But at the end of the day, that was a time last year, mid-last year, when negotiations started, no one was looking at the chemical industry. Yes, that's the industry where everyone thinks, oh, go away. Those are the industries where we look at things at the time of purchase.

At the time of purchase, as I said, chemicals naturally, then everything to do with equipment around energy. We have this heat exchanger business I mentioned, we have a second business that also deals with heat transfer in the broadest sense, Sofinter in Italy. We have a large transformer business in Portugal with Efacec. We have Quasdor Gas Engines, which is developing extremely well, and where I also see a huge market in the future. The energy sector, energy equipment, is an area that has been in focus in recent years and we have done quite a lot there. And last but not least, the logistics sector, where we have had very good experiences in recent years, both buying and selling well. We did something in Austria, Backcity, we sold a cold logistics provider Frigoscandia in the Nordics to a strategic buyer. We sold Intim to a large English strategic buyer. We bought and sold Fuent food logistics in Spain. So the logistics infrastructure area. We sold a former Arriva business in Poland and Serbia. Now we are going with the Danish business into the market. So in the area of infrastructure logistics we have also had focus in recent years, which went very well.

That is a very good question, because I think you have someone in me who still believes that the USA is the land of unlimited possibilities. I have family there in Texas, and everything is even bigger there than in the rest of the USA. We indeed started in America in 2025, have now made a large acquisition of Sabic, have made five acquisitions in total. I believe the USA will be our growth driver for the next 2-3 years. I just came back from the USA, was there for the last three days, and it is simply a country that looks forward, is more entrepreneurial. The automotive industry there is not a depressive gathering. I firmly believe in America, and it is also the jurisdiction where, from my perspective, we should invest in the next 2-3 years and will invest. In Europe we are the big player, we see all transactions. In the USA, I think we currently see maybe 5% of our potential. Yes, and there is still a lot to get. We will now open a second office in Houston, will go to New York in the medium term, so that we have three offices, because the country, unlike Europe, cannot be run from one location. It's too big. The banks are distributed. I think everyone is aware that it is as far from New York to Munich as from New York to Los Angeles.