The purity of fused quartz glass makes it an indispensable material found at the heart of products and processes across the semiconductor, lighting, chemical and electrical industries.
Through its unique combination of thermal, mechanical and optical properties, fused quartz is one of the most important materials for industry and research.
Based in Ilmenau, an area in Germany known for its technical expertise in everything to do with glass, QSIL is one of the world's leading manufacturers of fused quartz glass products. Under the trademark ilmasil®, QSIL products are supplied globally from the factories in Germany and The Netherlands.
QSIL is today controlled by the families of Stephan Behr, QSIL’s long-serving CEO, and Dr. Helmut Vorndran, who privately reinvested in the business after his private equity firm Ventizz realised its investment in QSIL in 2011.
With its sole focus being the development of fused quartz, over the last 26 years, the company has built strong competitive advantages through its expertise and capabilities and the quality of its processing technologies and products.
In 2016, QSIL acquired a large factory from Phillips in the Netherlands. It was a great opportunity to add a quartz glass manufacturing facility with different production technology enabling the company to then penetrate different segments of the semiconductor and optical fibre industries.
This was a significant step forward for the business, the transaction had been initially financed with bank debt. This put the company under significant operating restrictions. In addition, QSIL had plans to grow the business through some further add-on acquisitions and there was a desire to enable the CEO to redeem the indebtedness he had incurred privately in increasing his family’s stake in QSIL during his years of developing the business in the post-unification era.
In looking for a debt-financed solution, QSIL could not find a bank that was in a position to meet all these goals. In September 2016, QSIL was introduced to Pemberton as an organisation that could perhaps connect them with capital in a different way.
Pemberton was willing and able to provide financing that achieved all three goals, i.e. (i) refinancing of the Dutch acquisition; (ii) financing of the distribution; (iii) provision of a committed acquisition facility for the add-on acquisitions.
With the financing in place, QSIL proceeded swiftly with the integration of the Dutch facility and outperformed its business plan significantly on the back of strong demand from semiconductor clients. This triggered the need for investment in additional capacity, which the company was able to finance from cash flow.
On the back of such strong performance, QSIL was then able to speedily deleverage to levels at which a return to traditional bank financing became realistic at very attractive financing costs.
In a relatively short time, Pemberton had done its job. QSIL rightly took the opportunity to refinance and repay Pemberton and the company continues to go from strength to strength in its global market.
“Lending directly to family-owned businesses is a rewarding experience for a financier as the dialogue and engagement with the entrepreneurs that own and run the business is immediate and intensive”, says Jürgen Breuer, Head of Pemberton's operations in Germany. “Working with QSIL meant that, at a critical stage in its growth, we could be the organisation that enabled the company to seize the opportunity of a significant strategic acquisition and pursue its growth strategy with a more flexible financing solution.”
“It was impressive to see how, having gained a thorough understanding of QSIL’s business and market environment through their due diligence, Pemberton displayed the ability to back the entrepreneurial goals of QSIL’s shareholders whilst keeping an eye on an appropriate risk-adjusted return for their fund. This co-operation serves to show that complex financing requirements can be solved with the right partner. It also shows that working with such a partner does not tie you in if circumstances change.”
Copyright © 2019 Pemberton Capital Advisors LLP
Authorised and regulated by the Financial Conduct Authority