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Cross Holding Acquires 89.2% of KTM

February 14, 2005
Filed under Features

Austrian industrial investment company Cross Holding AG says it has acquired 48.9% interest in Austrian motorcycle manufacturer KTM. The company, which purchased the stock from British venture capital company BC Partners, now owns 89.2% of KTM.
KTM CEOs Stefan Pierer and Rudolf Knuenz have a majority interest in Cross Holding, which was founded 1990. Cross Holding holds its stake in KTM Group GmbH through its subsidiary, Cross Motorcyclebeteiligungs GmbH.
Terms of the deal were not disclosed. However, Cross raised 57 million euro (about $74.3 million) through a stock offering, and said it planned to use a portion of the funds to buy the British firm’s stake in KTM, and the remainder to bolster its 23% stake in Rosenbauer AG, one of the world’s leading fire truck suppliers and outfitters.
Stefan Pierer, Cross chairman, said KTM has plans to expand into the street motorcycle and ATV markets, and said synergies exist between KTM’s plans and Rosenbauer’s operations.
KTM posted sales of 402.4 euro million (approximately $524.3 million) for its fiscal year ended Aug. 31, 2004. The company said it sold 76,815 units worldwide. After-tax profits were up 52% to 26.8 million euro (about $34.9 million); Earnings before interest and tax (EBIT) were up 5% to 2.1 million euro (about $2.7 million).
Focusing on enterprises offering infrastructure for expansion, Cross makes venture capital available for small and middle enterprises in Austria, Germany and Switzerland. Cross’ investment strategy uses the financial and business expertise of the acquired company’s personnel, who function as managers but are not appointed to more senior leadership roles.
BC Partners purchased its stake in KTM Sportmotorcycle through a public tender offer in Austria in 2004.

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