Engineering group ATA acquires German cutting tools specialist Karnasch

Cavan-based precision engineering group ATA has acquired a German cutting tools specialist Karnasch Professional Tools, in a deal that values the enlarged business at €160 million.

The deal will increase ATA’s revenues from €57 million to €80 million, and increase its total workforce from 310 to 400, with 150 based in Ireland.

The acquisition was facilitated by senior debt from AIB and Bank of Ireland, with equity investments by the Ireland Strategic Investment Fund (ISIF) and Development Capital Fund (DCF).

This is ATA’s largest acquisition to date, with talks beginning about eight months ago.

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Speaking about the deal to The Irish Times, ATA chief executive Peter Cosgrove said: “We had wanted to get into the wider cutting tools category, and had been looking for an acquisition for some while. Our wider ambition is to be a top 10 cutting tools company globally, and that would have us at €200 million a year in revenue. We don’t know how long that will take, but it will be a mix of organic growth and other acquisitions.”

ISIF and DCF will each hold an 18 per cent shareholding in the enlarged group, while Mr Cosgrove and members of the management team will hold a majority stake in the group.

Established in 1960, Karnasch is a third-generation, family-owned company selling precision industrial tools, including for grinding, milling, cutting, sawing and drilling. It supplies a number of industry sectors including automotive, aerospace, construction and mechanical engineering, and exports to more than 60 countries.

Michael and Sascha Karnasch will continue as managing directors in Karnasch, retaining a 10 per cent shareholding in the German entity. Both will also join the ATA senior management team.

Industry leader

Commenting on the deal, Karnasch managing director Michael Karnasch said: “ATA are a progressive industry leader. We believe that our new combination provides many excellent opportunities to accelerate for growth, both for our business and for our employees.”

ISIF senior investment director Fergal McAleavey said the fund was “delighted” to team up with “ambitious Irish businesses such as ATA as they continue to scale up and expand their domestic and international operations”.

“This is consistent with ISIF’s mandate [from the State] of generating a commercial return and supporting economic activity and employment in Ireland.”

ATA operates in more than 70 countries, with a network of over 1,400 distributors and five facilities following the addition of Karnasch.

It was acquired by Mr Cosgrove and other investors in 2008, when the business had revenues of just €17 million. In 2016, Mr Cosgrove and members of the management team acquired the stake held by private equity group MML, backed by AIB and Investec clients.

ATA has acquired businesses in the UK and US over the past decade.