Thermamax on the block with Greenhill advising

German mid-cap market high temperature insulation supplier Thermamax is up for sale with Greenhill advising, said six sources familiar with the situation.

The company is owned by sponsor Brockhaus Private Equity, which holds just under 20%, and the company’s founders.

First round bids are due on 29 June, said two of the sources.

The company is marketed off projected EBITDA of EUR 18.2m for 2018, up from around EUR 14m in 2016. Thermamax has an EBITDA margin of 25% to 30%, according to the first source.

Private equity firms have approached financiers on the deal and strategic players are also showing interest, said the sources. But the company’s management will likely prefer a financial investor, added the first source.

Mannheim-based Thermamax designs and manufactures thermal and acoustic insulation systems for engine compartments and exhaust lines, which are used for diesel and gasoline engines, fuel cells, and electric drive systems. Its customers are vehicle producers, both on and off-highway, and manufacturers in the power generation, oil & gas and marine sectors, according to Thermamax’s website.

In 2015, the company’s large- and medium-sized engine business experienced low ordering activity from shipping customers which were impacted by slow economic growth in China and over capacities, while depressed oil prices led to falling investments in the oil & gas and marine offshore markets.

There was also lower demand for decentralised diesel and gas-fired power plants due to regional crises in developing and emerging markets. The cruise ship sector was the only well-performing segment that year, according to FY15 public filings for Thermamax Hochtemperaturdämmungen GmbH.

For 2016, the company expected revenue to increase by more than 10%, driven by further regulation of vehicle emissions which lead to growing demand for its products.

Thermamax also intended to expand its international presence, but operative margins were to remain under pressure because of pressure from competitors in the space, it said in the filings.

Brockhaus and Greenhill declined to comment. Thermamax was not available for comment.

by Fabian Graber in London