On October 29, global investment firm The Carlyle Group announced that it has agreed to acquire Flender GmbH, a market leader in mechanical and electrical drive technology, from Siemens AG for €2 billion. The transaction is still subject to regulatory approvals. Headquartered in Bocholt, Germany, and active across 35 countries including Asia, Flender is a global leader in drive technology employing approximately 8,600 people and had sales of some €2.2 billion in FY2020. The company’s comprehensive product and service portfolio includes gearboxes, couplings, and generators for a wide variety of industries including mining.
Leveraging its significant experience in the Industrials sector, The Carlyle Group said it will “support Flender to fully achieve its potential as a standalone company, driving accelerated growth through operational and strategic improvements, including investment into its technology and service platform.”
Andreas Evertz, CEO of Flender, said: “We are delighted to be partnering with Carlyle, a firm with a long history in growing Industrials businesses globally and supporting companies as they transition to become standalone entities. We look forward to working closely together as we continue to serve our customers around the world while also pursuing our growth ambitions.”
Gregor Böhm, Managing Director and Co-Head of Carlyle Europe Buyout, said: “As a global leader in gear and drive technology with a unique product and service portfolio, Flender is ideally positioned for further growth. Our significant Industrials expertise, as well as extensive experience with carve-out transactions, positions Carlyle well to support Flender with its continued growth and innovation. We look forward to partnering with the company’s management team and employees to further build on the company’s success.”
“By selling Flender, we’re successfully and rigorously continuing our strategy to become a new, focused Siemens AG. Our plan of fixing the businesses ourselves by introducing the structures used in small and mid-sized companies has proven effective. Now it’s time to position Flender as an independent company and give it the chance to realise future growth opportunities. This fast decision gives customers and employees clarity and a solid foundation for planning,” said Joe Kaeser, President and CEO of Siemens AG.
“Our original plan was to list Flender on the stock exchange through a spin‑off,” added Ralf P. Thomas, who is Chief Financial Officer of Siemens AG and is responsible for the area of the Portfolio Companies (POC). “Yet we’ve always been open for alternative solutions, too. The interest that numerous investors have taken clearly shows how attractive the company is and confirms the approach that we’ve been pursuing at our Portfolio Companies. The new ownership means that Flender will have the opportunities it will need in the future to optimise itself to an even greater extent and to address its customers’ requirements in an even more targeted way. Siemens and its shareholders will, in turn, benefit from further business focus and the attractive valuation and the inflow of liquidity.”
IM took the opportunity to talk to Flender CEO Andreas Evertz during this transition period, highligting the company’s strengths and activities plus future potential in the mining sector:
How has the relationship with Siemens evolved up to now and would you summarise the Flender offering to the mining industry?
For some time now, Flender has been on the way to more independence within the Siemens Group, which today has led to complete autonomy and in the near future under a new ownership structure with the completion of the deal with Carlyle. Flender offers a wide range of mechanical drive products for the mining industry. The product portfolio, which was offered on the market by both Siemens and Flender, only overlapped in a few areas. In particular, Flender offers solutions for applications with stationary machines. The overlap between Flender and Siemens are solutions for very high-power drives with more than 3,000 kW (4,000hp). This means mechanical drives with gearboxes from Flender and gearless drives from Siemens.
In the geared drive market has Flender been more focused on mining than Siemens, with Siemens focusing on the gearless solutions for mining?
Flender is an absolute specialist in mechanical drive technology, especially in the minerals and mining industry. We have solutions for almost all applications with a strong focus on mechanical drive solutions. We are convinced that geared solutions have more advantages in terms of CAPEX, flexibility as well as OPEX in minerals and mining applications compared to direct drive solutions – regardless from which supplier.
Is there now a defined division in terms of rated power or equipment size above which gearless starts to make more sense or are the two technologies competing in certain markets?
Originally, we thought we saw a trend towards gearless drives in the very high-power range, but the last few years have shown a different picture. The interest to work with gear solutions, also in the very high-power range, has increased very much. Due to continuous improvement of the gear technology, we are now able to offer our customers the highest performance and availability at affordable costs.
Are there particular drive sizes or applications in mining that Flender is most known for eg conveyors, ball mills etc?
As mentioned before, Flender is the absolute specialist in mechanical drive technology with solutions for almost every application in the minerals and mining sector. Especially in applications such as conveyor belts, mining trucks, pumps, flotation, mixers & agitators, mills, roller presses, etc we are very successful.
How important is the opening of the new high tech facility in Tonkin Highway Industrial Estate, Western Australia in terms of Flender’s strategy to grow in mining?
It is very important for the local market in Australia, especially in the western part. There is a large installed base in the western Australia mine sites and new projects are expected. So, an assembly and service facility is essential to service the installed base and increase the Flender market share too. Western Australia is a key market globally in the minerals and mining space and this investment is a critical part of executing our independence strategy and investing in being close to our customers. This also shows our long-term commitment to the mining industry. The new premises are the only OEM facility on the West Coast with a 1.5 MW test bench capable of testing complete drive systems up to a voltage of 6.6 kV.
What are the differentiators for Flender on the market versus others?
We continuously aim to maintain our technological leadership and to extend our leading position. Above all, we try to be not only a gearbox specialist for our customers, but also an application specialist who knows the exact requirements of our product and translates them into the individual solution. Partnership-based cooperation with our customers and highest reliability of our products are our concept for success.
When mining companies or EPCMs are specifying drives for major equipment types like mills and conveyors and crushers what are their main concerns – reliability, ease of maintenance, service support, or a combination of these?
Yes, reliability of the products, ease of maintenance, service support and reliable project management of the supplier are the main concerns. For the EPCMs it’s important that they work with a company like Flender who not only understand their product but also understand the customers application which then makes for the best solution.
