New majority shareholder: Maj Invest Equity takes 51% in Genan Holding
End-of-life tyre recycling firm Genan has a new majority shareholder after PKA, sole owner of Genan since 2014, agreed to sell 51 per cent of its shares in the company to Maj Invest Equity 5 K/S, a fund overseen by one of Denmark’s leading asset management companies. PKA continues to co-own Genan as minority shareholder.
Genan Holding A/S is the parent company of the Genan group, which operates six recycling plants – three in Germany and sites in Denmark, Portugal and the USA – as well as an innovation centre in Warwick. The company’s annual report for 2020 showed an EBITDA of just under 12 million euros, which the shareholders consider a “most satisfactory result” considering the Covid-19 crisis.
”Genan helps solve a major problem for society – and has the potential to grow considerably in the next few years. As majority shareholder, we would like to support and accelerate this development,” says Mads Andersen, partner in Maj Invest Equity. ”Genan has developed steadily in the past five years – and has consolidated really well. We expect international focus on sustainability to create a growing need for Genan’s products and services for the next many years.”
Every single day, more than seven million tyres are dismounted from vehicles all over the world, and the majority of these tyres are incinerated or disposed of in landfills – to the detriment of the environment. Globally, Genan currently has the capacity to process more than 400,000 tonnes of tyres annually. It transforms these worn-down tyres into useful materials that can be used for numerous different purposes. Genan reports that the recycling of end-of-life tyres at its factories saves up to 280,000 tonnes of CO2 emission annually in comparison with energy recovery through incineration.
Unusual for PKA to be majority shareholder
PKA took 100 per cent ownership of Genan in 2014 to ensure the company’s survival after a showdown with the previous majority shareholder, who was later convicted for fraud and aggravated mandate fraud.
”Ever since the ownership reconstruction, we have focused on turning the company around – in order to safeguard the jobs of the many employees and to preserve important know-how. Both management and staff have handled this really well, and the development of the company has been positive ever since,” says Michael Nellemann Pedersen, chief investment officer at PKA. ”It is indeed unusual for PKA to be the majority shareholder of a company. We are thus most satisfied to be welcoming as co-owner a majority shareholder sharing our perception of the long-term potential for the development of this company being an essential contributor to the solution of a global environmental problem.”
The two entities have not disclosed the sales price of the shares to Maj Invest Equity 5.