Deal: Trade sale
Company sold: Deutsche Waggonbau
Buyer: Bombardier, Canada
Completed: February 2 1998
Adviser: Advent International
The last thing you might expect to hear, when telephoning Deutsche Waggonbau (DWA), the train rolling-stock manufacturer based in east Berlin, is calypso music. But that's what you get when waiting to talk to one of their busy staff. The party mood is quite appropriate.
The company has long been heralded as one of the few success stories to have emerged from the mire of east German industry. It steadily built up its market share first within the Treuhand system (the process designed to privatize former East Germany's businesses), and then, since 1995, under the ownership of investors advised by venture capital firm Advent International. Last month plans to list DWA on the Frankfurt stock exchange were dropped in favour of a trade sale to Bombardier, a Montreal firm specializing in transportation equipment, aerospace and recreational products.
DWA owes its success to two crucial factors. First, it enjoyed a near monopoly on supplying train carriages to Deutsche Reichsbahn, East Germany's rail network. It was also a major supplier of carriages to rail networks in other Soviet- bloc countries, especially Russia's Leningrad-Vladivostok passenger service.