ContiTech negotiating sale of profiles unit to SaarGummi's buyer

By Liz White, ERJ staff

Hannover, Germany-ContiTech AG is in talks with private equity group Orlando Management GmbH about selling its automotive door and window sealing unit ContiTech Sealing Systems, a spokesperson for ContiTech confirmed 26 July. The deal may be concluded during August, the spokesperson added.

The potential buyer is a fund advised by Munich-based Orlando, Special Situations Venture Partners Fund, according to an Orlando spokesman.

Special Situations is the holding company for SG Sealing Ltd, the former SaarGummi automotive profiles and rubber moulding business sold by RAG Saarberg in 2004.

For SG Sealing, the logic behind the acquisition is the ongoing consolidation in the car body sealing business” globally, Orlando's spokesperson commented. Overcapacity in this business has resulted in low profitability and high competition for many years, and has resulted in a recent spate of equity group takeovers of major sealing systems groups, forcing some rationalization of the sector.

ContiTech desperately wants to sell the profiles business,” commented the Orlando spokesperson. Hannover-headquartered Continental AG, ContiTech's parent, has long struggled to make this unit effective, and has made no secret of its willingness to sell, should the right buyer come along.

As far back as 1997, ContiTech was looking for a partner for the extruded automotive profiles unit, after determining the activity was too small to compete effectively with larger, and growing, competitors.

ContiTech Sealing Systems employs 1300 at plants in Slovakia 9, Germany and Spain, and last year posted revenues of Euros 76 million, a rise of 14 percent over the previous year, Conti said.