Case Study ista: Digging Deep into CVC’s Long-Term Investment

Abstract

In 2017, CVC sold its target company, ista to a Chinese infrastructure investor after an investment period of 14 years. This transaction was the largest private equity exit from a German target company up to date. The authors investigate the transaction structuring and financing as well as CVC’s impact on the financial performance and business development of the target company. The analysis shows that ista grew steady regarding revenue and EBITDA, employed more people, and performed comprehensible internationalization and business area extension decisions. However, the company also seems to be condemned to success. With each new transaction cycle, the level of liabilities and interest payment obligations increased. ista had to grow and increase efficiency continuously to meet the expectations of debt, mezzanine and equity capital providers. This article provides a holistic overview of the investment phase, enabling the reader to form an opinion about CVC’s long-term involvement and to adopt the strategies used in this practical application.

TOPICS: Private equity, emerging, equity portfolio management, legal/regulatory/public policy