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Siemens sells Innomotics to KPS for €3.5bn
Siemens is selling its Innomotics electric motors and large drives business to the venture capital firm, KPS Capital Partners, for €3.5bn. The sale is expected to close in the first half of fiscal 2025, subject to the foreign-investment and merger control approvals.
Innomotics was born in November 2022, when Siemens decided to combine its businesses for large drives and electric motors and set them up independently, outside its core business. It says that the sale to KPS, “which is beneficial for all parties involved”, offers a fast track to a successful future, so it has decided not to pursue its plan to list Innomotics publicly, as announced in November 2023.
The Japanese motor-maker Nidec has been rumoured to be a potential bidder for the Innomotics business, but KPS emerged as the front-runner a few weeks ago.
Innomotics manufactures a portfolio of low-, medium- and high-voltage motors, medium-voltage drives and other components, as well as offering customer services. Headquartered in Nuremberg, Germany, it generates around €3.3bn in annual revenues, employs about 15,000 people. It operates 16 factories across the EMEA, Americas and Asia-Pacific regions.
“By selling Innomotics to KPS, I am pleased that we have made further significant progress in optimising our portfolio,” says Siemens’ chief financial officer, Ralf P. Thomas. “The search for the best new owner has been successful.
“This decision gives customers and the people who work at Innomotics clarity and paves Innomotics’ way to extensive opportunities for further successful business development,” he adds. “In the future, Siemens and its shareholders will benefit even more from combining the real and the digital worlds.”
KPS operates in the US and Germany, with its European headquarters in Frankfurt. Companies in its portfolio currently generate €2bn in revenues and operate nine manufacturing facilities with more than 5,200 employees in Germany (excluding the pending acquisitions of Innomotics and Sport Group).
Since 2020, KPS has acquired or committed to acquire 17 businesses for an aggregate value exceeding $11.5bn from corporate sellers in Europe. Its recent acquisitions include Chassis Brakes International from Robert Bosch, Waupaca Foundry from thyssenkrupp, TaylorMade from adidas, and Sport Group from Equistone Partners. KPS has formed a new affiliate to buy Innomotics.
“We are excited to acquire Innomotics and create a thriving independent enterprise, built on the foundation of the company’s 150-year history of unparalleled technological innovation,” says KPS’ co-founder and co-managing partner, Michael Psaros. “Innomotics is a global industry leader in electric motors and large drives. In many ways, KPS is investing in the future of the 21st Century through Innomotics.
“The company is well-positioned to capitalise on the global megatrends of electrification, energy efficiency, digitalisation, urbanisation and the commercialisation of new energy resources such as hydrogen,” he adds. “We look forward to working with Innomotics’ senior management and stakeholders to aggressively accelerate the company’s growth trajectory and value creation opportunities.”
Innomotics CEO Michael Reichle, says that “KPS, with its demonstrated track record of manufacturing excellence and its global platform, is the ideal owner for the new Innomotics. “The partnership with KPS will support Innomotics in further expanding our extensive track record of successful technological innovation and providing our customers with world-class products, solutions and services.
“We look forward to working closely together with KPS and our talented people as we continue to deliver significant value for our customers around the world and enhance Innomotics’ strong technological leadership,” Reichle continues. “Innomotics will continue to benefit from strong growth potential driven by the sustainability-oriented demand for highly efficient electrification and energy consumption in industry and society.”
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