>>> CGS BUY & BUILD

Maag – a success story

Antonio Cives, Managing Partner

The success story started in April 2008 when CGS took over the German company Automatik Plastics Machinery, a spin-off of the Swiss Rieter Group. A targeted Buy & Build strategy was to turn the company into a strong group operating around the world. The most important step was the merger with Maag Pump Systems and the resulting Maag Group is now part of Dover, listed on the New York Stock Exchange.

Automatik was a leader in pelletizing systems for the plastics industry but it lacked new locations around the world to get closer to its customers. Just after CGS’s takeover, this need was met: Automatik opened new production and service locations in China and the US as well as distribution and service centers in Malaysia, Taiwan, and Brazil. Two years later, the Buy & Build strategy reached a major milestone in its implementation: the merger with Maag Pump Systems that led to the Maag Group. Thanks to the excellent match of the two companies’ product portfolios, the group gained an excellent reputation and a unique position in the global market of the plastics and extrusion industry with its customized system solutions.

CGS helped improve Maag’s operations in a number of ways. For example, it set up a worldwide sales organization, reoriented business units with a clear market focus, streamlined production centers, and accelerated product development.

After the companies were successfully integrated, CGS sought a strategic partner that could afford Maag Group the best possible environment for further growth. They hit the bull’s eye with Pump Solutions Group of Dover in 2012.

CGS and Ueli Thürig, CEO of Maag, met up again this past summer and took a look back at their time together.

Ueli Thürig, 57, CEO of Maag, holds a diploma from the Swiss Technical College Winterthur and an Executive MBA from the University of St. Gallen (HSG).

Mr. Thürig, how did you first hear of CGS?
Mr. Lanz and Mr. Gloor had contacted me in 2009 because they were interested in Maag Pump Systems as an expansion for the construction of an industrial group. The vision at that point in time was to build a globally leading plastics manufacturing systems provider.

What was the reasoning behind the decision of Maag Pump Systems to merge with Automatik?
Maag Pump Systems’ owners and I had also thought about a Buy & Build strategy. The idea here was to expand our product portfolio in the traditional markets – and we had already been looking at Automatik for a while, keeping it on our list of potential acquisitions.

Did you consider other options at the time?
Of course. But we concluded that merging with Automatik was a good solution for us and our customers and that it would generate the most added value for the shareholders, given that we both served the same customers and were a lot stronger on the market when together.

Looking back, how would you assess the Buy & Build strategy?
It was the best solution for us, offering the most added value for the company and for our customers. We continued to pursue the strategy after CGS’s exit.

And did it deliver?
Yes. We even surpassed the expected growth rate thanks to the strategy.

What were the highlights for you while working together with CGS?
The best part was that as CEO, I had full control of the company and was allowed to successfully develop the business as its CEO and as an entrepreneur. It was certainly also exciting to gain deeper insight into the business model of financial investors.

Maag – a global leader in the manufacturing of gear pumps, pelletizing and filtration systems, and powder mills for high-performance applications in the plastics, chemicals, petrochemicals, pharmaceuticals, and foodstuffs industry.

Were there problems too?
Of course. The times during the financial crisis, 2009 and 2010, were challenging. And it was not always pleasant talking to creditors, given the project-based nature of our business. Yet in the end, my team and I were able to learn a lot.

What would you tell a company that is currently facing the same challenge that you tackled back then? What should it bear in mind?
I think there are two essential factors. The strategy has to be the right one for the company and it should be clearly defined before cooperation with a partner starts. And do not forget about the people; good and open cooperation between the owners and the company’s management is important for the company’s success.

Maag is a byword for high-quality products such as gear pumps for processing plastics and elastomer.

CGS sold the participation to Dover in 2012. How has Maag developed since then?
Very well. With Dover’s support, we have been able to continue to grow, organically but also via acquisitions. Today, we lead our market segment with over 1,000 employees.

What do you see as Maag’s current challenges?
Our projects are getting larger and larger and increasingly demanding, entailing greater technical and financial risks for our company. We need employees with the best training available to mitigate these risks. Unfortunately, it is hard to find them on today’s job market.

Where do you see Maag in the next five to ten years?
Our vision is to continue growing profitably and to double our turnover in the next five years.
see www.maag.com for more information

Back >