Harris Williams & Co. Ltd Advises Grohmann Engineering GmbH on its Pending Sale to Tesla Motors

November 9, 2016

Harris Williams & Co. Ltd, a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the pending sale of Grohmann Engineering GmbH (Grohmann Engineering) to Tesla Motors (Tesla; NASDAQ:TSLA). Grohmann Engineering is a developer and manufacturer of highly customized, high yield, multi-process modular assembly solutions for future oriented end-markets. Harris Williams & Co. served as the exclusive financial advisor to Klaus Grohmann, founder and majority stakeholder of Grohmann Engineering, and Deutsche Beteiligungs AG (DBAG; XETRA:DBAN), a leading German listed private equity company and minority stakeholder of Grohmann Engineering. Post transaction, Grohmann Engineering will become Tesla Grohmann Automation and serve as the initial base for Tesla Advanced Automation Germany headquarters, with other locations to follow. The pending transaction is expected to close by year-end and was led by Jeffery Perkins, Lars Friemann and Florian Ripperger of Harris Williams & Co.’s Frankfurt office.

Elon Musk, founder and chief executive office of Tesla, noted, “This will really be our first acquisition of significance in our whole history. We thought it was important that Tesla becomes, in part, a German company. That’s what this was all about. We expect this to help drive exponential improvements in our production process, in terms of both speed and quality of output, while cutting the cost-per-vehicle at the same time. The new facility will also grow its engineering workforce considerably in the next two years, with a target of adding more than 1,000 jobs throughout our new Advanced Automation division in both engineering and skilled technician roles.”

Torsten Grede, spokesman of DBAG’s Board of Management, commented, “This exit concludes a highly successful growth financing investment in one of our core sectors. With its technology leadership, Grohmann Engineering exemplifies the hidden champions in Germany’s ‘Mittelstand’ without whom key innovations would not occur. Moreover, Grohmann Engineering is an outstanding example of the excellent progress technology-geared mid-market companies can make when backed by growth capital and the support of professional investors.”

Jeffery Perkins, a managing director at Harris Williams & Co., stated, “We are very happy that Grohmann Engineering has found a new partner in Tesla that will greatly benefit from Grohmann Engineering’s technological leadership, while also supporting the company’s continued growth and Industry 4.0 leadership role in its selected end markets. This transaction further demonstrates Harris Williams & Co.’s focus on advising market leading family owned businesses and supporting them on finding their optimal partner. We very much enjoyed working with Mr. Grohmann and his team on this successful transaction.”

Founded in 1983 and headquartered in Pruem, Germany, Grohmann Engineering develops and manufactures production lines for industrial automation and markets them worldwide. Working closely with clients and suppliers, the company is a key contributor to breakthrough technologies, for example, those required for the industrial production and assembly of lithium-ion batteries and the testing of microchips and wafers. In addition to the automotive, electronics and semiconductor industries, the company’s machines and plants are also employed in biotechnology and medical applications. In recent years, Grohmann Engineering has developed and realized numerous lines for German and international automobile manufacturers on which battery cells and batteries for electric vehicles are produced.

DBAG, a listed private equity company, initiates closed-end private equity funds and invests alongside the DBAG funds in well-positioned mid-sized companies with potential for development. DBAG focuses on industrial sectors in which Germany’s ‘Mittelstand’ is particularly strong on an international comparison. With its experience, expertise and equity, DBAG supports the portfolio companies in implementing corporate strategies that sustainably create value. Its entrepreneurial approach to investing has made DBAG a sought-after investment partner in the German-speaking world. Assets under management or advice by the DBAG Group amount to approximately €1.8 billion.

Tesla designs, develops, manufactures and sells electric vehicles and energy storage products. The company produces and sells two electric vehicles: the Model S sedan and the Model X sport utility vehicle (SUV). The company has delivered over 107,000 Model S vehicles across the world. In addition to developing its own vehicles, it sells energy storage products. Its energy storage products include the seven kilowatt-hour and 10 kilowatt-hour Powerwall for residential applications, and the 100 kilowatt-hour Powerpack for commercial and industrial applications. The company delivers energy storage products under the Tesla Energy brand. It manufactures its products primarily at its facilities in Fremont, California, Lathrop, California, Tilburg, Netherlands and at its Gigafactory near Reno, Nevada. It is using battery packs manufactured at the Gigafactory for its energy storage products.

Harris Williams & Co. (www.harriswilliams.com), a member of The PNC Financial Services Group, Inc. (NYSE:PNC), is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements and capital markets advisory services.

Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC and Harris Williams & Co. Ltd, which is authorized and regulated by the Financial Conduct Authority.  Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.