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Ratos exits ‘bad investment’ Contex Group to Procuritas

30 Nov 2012

Ratos plans to wind up portfolio company Contex Group after agreeing to sell its 2D scanner business to fellow private equity firm Procuritas for $41.5m.

The firm estimates it will lose about SEK125m (18.8m) from its 2007 deal for Contex Group despite its exit of Contex A/S, the world’s largest manufacturer of large-format 2D scanners.

That deal and a dividend paid following the wind up of the parent company will net Ratos about SEK175m ($26.3m), the firm said.

Ratos paid about $240m for the asset when it bought it from EQT Danmark and other investors.

Last year the firm sold Contex Group’s two other subsidiaries, Z Corporation and Vidar Systems, to US company 3D systems.

Ratos CEO Susanna Campbell said, “We acquired Contex at the height of the boom in 2007 and the financial crisis with the subsequent recession unfortunately meant that Contex Group became a bad investment for us.

“Operationally we are still pleased since the company’s management has achieved a fantastic turnaround and due to our continued investment in research and development, new products were launched in the market which contributed to today’s good earnings and market position.

“The company is now ready for its next journey and we have therefore decided to sell.”

Ratos said its IRR on the total investment in Contex Group had been -16 per cent.

The result is in stark contrast to the 55 per cent average annual IRR Ratos made by selling Danish telecoms operator Stofa to Danish energy and telecom group SE in October.

The firm said it made a net exit gain of about SEK850m ($127m) through the  DKK1.9bn ($331m) deal for Stofa, which provides broadband, cable TV and telephone services to about 375,000 Danish households.

Ratos had only controlled the company for two years.

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