Norma Group SE, a German maker of hose clamps and pipe connections for everything from cars to washing machines, rejected several takeover approaches in recent months from bidders including Carlyle Group Inc., people familiar with the matter said.
(Bloomberg) — Norma Group SE, a German maker of hose clamps and pipe connections for everything from cars to washing machines, rejected several takeover approaches in recent months from bidders including Carlyle Group Inc., people familiar with the matter said.
The company, based in Maintal near Frankfurt, explored a potential sale with advisers toward the end of 2022, according to the people, who asked not to be identified because discussions are private. At least three buyout firms showed interest, including Carlyle, which made multiple approaches at a significant premium, the people said.
Norma rejected the proposals and it remains unclear whether sales talks will be revived, the people said. PAI Partners and Triton also looked at Norma at that time, they said.
Shares in Norma rose as much as 16% in early trading on Tuesday—their biggest ever intraday jump. The stock was up 15% at 9:24 a.m. in Frankfurt, valuing the company at €734 million ($788 million).
Norma’s shares have rebounded in 2023 after losing roughly half their value last year. This has made it harder for buyout firms and management to agree on a justified premium, the people said. Representatives for Norma, Carlyle, PAI and Triton declined to comment.
While private equity firms sitting on more than $1 trillion in dry powder are scouting for take-privates, those deals have largely dried up in Europe due to tough financing markets. Still, smaller acquisitions like Norma can be financed by private lenders and buyout firms are also putting up bigger equity checks to get deals done.
Norma is being run by interim chief executive officer Miguel Ángel López Borrego after the departure of Michael Schneider last year, which created a possible power vacuum for potential acquirers. The company, which issued a profit warning in mid-2022, is focused on efforts to “stabilize profitability, compensate for inflation-driven cost increases and enhance plant productivity,” the interim CEO previously said, citing “challenging times.”
On Tuesday, Norma reported adjusted earnings of €99 million for 2022 that beat average analyst estimates. Announcing the results, López Borrego said the company will “use the weeks and months ahead to focus on previously untapped growth potential in the high-margin industrial and water businesses.”
Norma was impacted last year after Russia’s invasion of Ukraine increased the price of raw materials such as steel and plastic resins and created supply-chain bottlenecks. The 125-year-old company has almost 9,000 employees and operates in more than 100 countries that churn out clamps, connectors and fluid systems for machines, vehicles, engines and household appliances.
–With assistance from Eyk Henning.
(Updates with shares in fourth paragraph, earnings in penultimate paragraph.)
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