Kendrion sharpens strategic focus with sale of Chinese division
On 27 August, industrial supplier Kendrion announced it had reached an agreement to sell its Chinese division to a consortium of investors led by local management. The transaction values the division at €70 million for Kendrion — equivalent to 9.5 times the China division's EBITDA over the past twelve months, while Kendrion as a whole was valued at approximately 6.9 times EBITDA ahead of the transaction.
Given the size of the deal and our active involvement with the company, Teslin was involved at an early stage. Under a standstill agreement, we contributed our thinking on the strategic rationale, the valuation and the use of the resulting capital. We are pleased with the outcome: Kendrion is sharpening its strategic focus, while the proceeds create room for shareholder value creation. Of the €70 million proceeds, the company will use approximately €25 million for a share buyback programme and a one-off dividend payment. The remaining amount will be used to strengthen the balance sheet.
Strategic rationale
For us, the strategic logic of the transaction is what matters most. From China, Kendrion mainly supplied the automotive industry — a market it had largely already exited following the sale of its European and American automotive division in October 2024. Although the Chinese division benefits from rapid growth in electric vehicles, competition there is now increasing sharply, which could put pressure on prices and margins over time. By selling now, Kendrion realises an attractive valuation, at a moment when growth is visible but price pressure is still limited.
Full focus on industrial components
With this sale, Kendrion completes its transition to a pure-play supplier of industrial components. These industrial activities are structurally more profitable, thanks to a broadly diversified portfolio and a strong position in niches where the company adds value through specialised knowledge and tailored solutions.
Outlook
We are pleased with Kendrion's strategic repositioning as a 'pure-play Industrial' company. The company can now focus entirely on building out its strong market positions, and we are confident it will benefit from a recovery in the European industrial sector from this foundation. At the same time, we believe it is important that Kendrion continues to work on further revenue growth to increase scale, so that it can remain relevant within the sector. The strengthened balance sheet also creates room for acquisitive growth, which could provide an even stronger foundation over time.
The announced share buyback also underscores that management, like us, sees substantial undervaluation of the share. The market welcomed both the deal and the strong results published that same day: on the day of the announcement, the share price rose by more than 12%.
We maintain a constructive relationship with Kendrion's management and remain closely involved in realising the company's value potential together.
Through the positions held by the Teslin Participaties and Midlin funds, Teslin holds a combined stake of more than 20% in Kendrion.
This is a marketing communication. Please consult the prospectus of Teslin Participaties, Gerlin Participaties and Midlin (the 'Funds') and the key information documents before making an investment decision. Teslin Participaties, as a constructive, engaged and active shareholder, holds substantial stakes in Dutch listed companies. Gerlin Participaties, as a constructive, engaged and active shareholder, holds substantial stakes in German listed companies. Midlin, as a constructive and engaged shareholder, holds stakes in European listed companies. The Funds are included as investment institutions in the register maintained by the Dutch Authority for the Financial Markets (AFM). For more information on material risks for the Funds, see the prospectuses and key information documents.
