The company INDUSTRY INNOVATION, a.s. owned by the Czech businessman Michal Strnad, sold the South Bohemian machine tool manufacturer Kovosvit MAS to the group of prominent Russian industrialists acting as private investors through investment fund Trust Union Fund Industrial. The price of the transaction was in the hundreds of millions of crowns. Thanks to the background of an industrial group doing business in a similar field in Russia, the new owners should open new markets for Kovosvit MAS. A significant promise in this regard is the EUR 15 million contract brought by the new owners.
The current owner of Kovosvit MAS was a Czech businessman Michal Strnad through INDUSTRY INNOVATION, a.s., which is wholly controlled. He is also the owner of the industrial holding CSG. However, Kovosvit MAS as a company in crisis management mode was not included in the CSG holding. Michal Strnad states: “We joined Kovosvit in the autumn of 2016, when it was in a critical situation. The company managed to save and stabilize, but the synergies within the group did not work as originally planned. That is why we have been looking for an investor for more than a year who would buy the company and have the prerequisites to further develop it. Although we do not disclose the exact price of the transaction, I can state with satisfaction that it is comparable to the initial investment in my property entry into Kovosvit. ”
Daniel Kurucz, Chairman of the Board of Directors of Kovosvit MAS, states for sale: “We negotiated the sale of Kovosvit for several months and we had more interested parties from Germany, Poland and Turkey. In the end, we decided on the Trust Union Fund. We chose it not only because of the agreed price conditions, but also because it will help Kovosvit to multiply sales in the eastern markets, where the Kovosvit brand has a historically excellent name.”
Pavel Kovář, managing director, recalls: "The success of Kovosvit has always been based on its success in the Eastern markets." Václav Zahrádka, CFO, states: “The positive expectations regarding the new owners are backed by the new contract for the delivery of 60 new machining centers over the two years they have brought. Its total value is EUR 15 million.”
Daniel Kurucz adds: “In 2019, the machine tool market gradually cooled, and the situation deteriorated further in connection with the coronavirus pandemic, when demand for machining centers fell, especially in Western Europe. The new owner has the potential to help Kovosvit increase sales in the markets where it operates for a long time, maintain employment in the company and even create new jobs.”
Alexey Kartavtsev, Strategic Projects consultant and M&A advisor from the Trust Union Fund side, says: “We thank Mr. Strnad and his team for an agreement that gave us the opportunity to participate in the history of the legendary company. We will do everything to make Kovosvit MAS a leading position in the field of machining centers to which the company belongs.”
According to the agreement between the seller and the buyer and also in the interest of a smooth takeover of the company, the current management will remain in Kovosvit MAS in the coming months, headed by Chairman of the Board Daniel Kurucz and managing director Pavel Kovář.