Versatile and successful

A management buyout is a form of acquisition where a company’s exisiting managers acquire a large part or all of the company.A particularly succesful example for this strategy is provided by the Czehc company Sanborn a.s. The former repair shop of the country’s national electricity group is now a versatile, privately owned business with a wide variety of activities in mechanical engineering.

Before the fall of the Wall, SANBORN operated as the repair and maintenance arm for CEZ, the Czech Republic’s national electricity company. Then it was acquired by the US-based SANBORN Inc. which went bankrupt in 1994. The management signed buy-out agreement in 1995. The loan provided by the Dutch banks to buy the share was fully paid off in 1999. “Today, we are diversified mechanical engineering firm with activities ranging from repairs and refurbishments of water, steam and gas turbines to the manufacture of high-strength fasteners and customised parts per customer drawings,” explains President Anthony Zak. SANBORN has 200 employees and turns over approximately eleven milion EUR. The export share is high 81%; customers include such well-known names as Alstom, Deutsche Bahn, General Electrics and Siemens. “We have a large quantity of raw high alloy steels in stock with 100% material certification and can start production instantaneously upon receipt of a new customer order,” states Mr. Zak. Other success factors include the long-term relationship which SANBORN has established with many of its customers and the high qualification of the company’s employees. Based on these strenghs, SANBORN is planning to advance into higher-quality steel i order to develop new markets such as aviation and aerospace.