Successful story in a difficult market
In 2011, GPEF II acquired a 66% stake in Brno-based company AZ Klima, a leading player in the local HVAC (i.e. Heating, Ventilation and Air Conditioning) market. The Company is active in design and production of air-handling and cooling equipment for buildings, including customized ductwork, air handling units and accessories, as well as project management and services.
Prior to the investment, the Company had enjoyed an established position in the market with a successful trackrecord in a challenging environment, withstanding the post-crisis industry slowdown. GPEF II proceeded with the investment despite the adverse market conditions, building the investment case on an experienced management team, solid business fundamentals and favourable entry valuation.
During the investment period, AZ Klima significantly outperformed the market and, despite the declining industry trends, managed to increase its turnover by almost 50%, while also strengthening its profitability and market share.
The investment has been an excellent example of ownership succession. Following the entry of GPEF II, the original founder retained a 30% shareholding and remained in the execution role for two years, while being gradually and consensually succeeded by an existing experienced management team, which had acquired a minority stake alongside GPEF II. The new management team also led the Company’s growth and prepared AZ Klima for exit to a strategic buyer.
In September 2016, GPEF II sold its stake in AZ Klima to CEZ ESCO, part of the CEZ Group, the second largest Czech company. An investment made in a stagnating market environment became one of the most successful stories in the history of Genesis funds.