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A cash infusion for Germany's Autania.

"We believe there's opportunity there, especially in the niches that the company operates in," opines Stefan Schmidt, who heads the Frankfurt, Germany, office of American investment company Allied Capital (Washington, D.C.). In September Allied announced a subordinated loan of 10-million Deutsche marks ($4.5-million) to machine-tool builder WFL Millturn Technologies G.m.b.H. & Co. (Linz, Austria) and, for another DM 5-million, acquired a 5% stake in WFL Millturn's parent, Autania A.G. (Kelkheim, Germany).

Autania is headed by Dr. Helmut Rothenberger, who years ago helped his brothers run the Pittler Group of machine-tool companies.

It's not the first time that Allied Capital (NYSE: ALD) invested in Autania. The "Public Investor's Private Equity Firm" helped fund Autania's June takeover of the balance of stock in Wirth & Gruffat S.A. (Pringy, France), the producer of dial index machines and turning centers. As part of the same financing package, which also included debt through an Austrian banking consortium, Autania acquired Bad Duben Profilwalzmaschinen G.m.b.H. (Bad Duben, Germany), the producer of thread- and profile-rolling and ring-rolling equipment.

Allied Capital's strategy is typical of investment houses. "We go in where banks don't and the owners don't have the capital to expand," Allied's Stefan Schmidt explains. "Our time frame is typically four to six years and then we cash out." WFL Millturn is using some of that money to fund an expansion of assembly area by 25%. The large Millturn multifunction machines, some of which can weigh 50 tons, will be erected in new 1300-sq.-meter bays at Linz.

Allied Capital's stake is in, as Schmidt puts it, a stable and predictable business plan with good cash flow. New orders year-to-date at WFL Millturn are up 19% over last year, despite the worldwide machine-tool downturn.

In addition to WFL Millturn, holding company Autania ( also operates Elb-SchliffWerkzeugmaschinen G.m.b.H. (Babenhausen, Germany), which specializes in creep-feed grinding.
 Do the recent acquisitions mean Autania is on the road to becoming another
 Pittler Group?

The Pittler Consolidated Group was controlled by the Rothenbergers and in early 1990s had assembled a cluster of firms that included Pittler, Motch, Naxos-Union, Diskus Werke, Fritz Werner, Niles, Magdeburger, and Tornos-Bechler. By the end of the decade, the machine-tool conglomerate unraveled as financial woes mounted and as the brothers went in separate directions. Now Karl Rothenberger is retired and Gunther Rothenberger is concentrating on real estate, leaving Helmut in machine tools.

Autania had also been part of the Pittler Group. Its function as a holding company was instrumental when it took over WFL Millturn. The Austrian machine-tool builder had been founded in 1945 as turning-machine producing portion of metals producer Voest Alpine, and in the mid-1980s started producing a proprietary five-axis turning-drilling-milling center it dubbed Millturn. When the company was acquired by Autania A.G. in 1993 it had become part of the Voest Alpine Steinel Ges.m.b.H. organization; it was refounded as Werkzeugmaschinen-Fabrik Linz Ges.m.b. It. (WFL). This year Autania renamed it WFL Millturn Technologies G.m.b.H.K.G., underlining the Millturn machines, sold in the U.S. through Motch.

WFL Millturn Technologies G.m.b.H., Linz, Austria. [43] 70-69411-0.

Autania A.G., Kelkheim, Germany. [49] 6195-976612.
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Publication:Metalworking Insiders' Report
Date:Nov 28, 2001
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