China’s Centurium Capital acquired German industrial automation business Ruhlamat, marking its debut cross-border deal, shortly before the latest round of US tariffs. Charles Lin, a managing director at the GP, described it as a succession transaction with a risk-aware geopolitical overlay: Ruhlamat’s headquarters have moved to Singapore; China is now home to R&D operations.

“This is about de-globalisation. China was previously the manufacturing hub, now people want ‘local for local’ to ensure supply chain security,” said Lin. “We’re seeing a growth in production capacity in Eastern European markets like Romania, Czech Republic, and Slovakia, which are serving European market. In North America, production capacity in Mexico will mainly serve the US.”

The goal is to maintain Ruhlamat’s global positioning while leveraging China’s engineering advantages. Lin noted that global customers are broadly unified in their belief that no other market can match what China offers in terms of engineering, delivery, quality, and cost-effectiveness.

Familiar target

Centurium acquired 100% of Ruhlamat, including its brands, through its second US dollar-denominated fund, which closed in July 2024. Lin declined to disclose the deal size, but he observed that the valuation was attractive, based on annual revenue of nearly USD 200m. Centurium relies on EBITDA multiples in overseas markets, rather than the price-to-earnings figure popular in China.

It identified the asset during due diligence on a similar European project two years ago, which gave the firm confidence to move quickly and decisively once a sale process was launched. The investment case was based in part on the belief that operational improvement could help address management inefficiency in Ruhlamat’s Asian subsidiaries.

“Essentially, what we have acquired is the brand’s technical know-how, which comes with over 700 engineers and an established product portfolio. We can now leverage our expertise to enhance governance, organisational structure and operational efficiency, supporting the company’s strategic planning, product rationalisation, digital transformation, global expansion and M&A,” Lin said.

Founded in Germany in 1991, Ruhlamat is the largest of three key business units automation and machine construction giant Mack Group. It has delivered over 2,500 automated production lines to global manufacturers in the automotive, pharmaceutical, and alternative energy industries.

The company operates in more than 20 countries across Europe, the Americas, and Asia-Pacific. An Asia headquarters was established in China in 1998, and most of the 1,100 staff are based there. The Centurium-driven reorganisation involves placing the mainland China entity – Ruhlamat Suzhou – under the Singapore parent. It sits alongside subsidiaries in India, North America, Mexico, and Germany.

The automation angle

Within technology and industrials, the private equity firm is interested in multinational carve-outs with a strong China angle and exposure to markets like the US, Europe, and Japan. Domestically, it is evaluating serval deals largely predicated on delivering improvements in operating efficiency.

While Ruhlamat represents Centurium’s industrial automation debut, domestically and overseas, it sees long-term value in the vertical, not least as a solution to global demographic changes. This asset will serve as the foundation of a buy-and-build strategy, with a view to creating a platform that appeals to international strategic investors or is suitable for an offshore IPO.

Priorities for the next six months include completing the organisational restructuring and putting in place management incentive mechanisms and IT systems. M&A targets will also be scoped out.

Centurium’s operational efficiency agenda is intended to address top-line revenues and bottom-line costs. On the revenue side, it wants to standardise pricing, clarify sales responsibilities, and speed up commission distribution. Staff will also be incentivised to trim costs. Beyond that, the GP believes it can deliver savings in areas like procurement where Ruhlamat has been paying more than its peers.

Lin likens the value creation process to “going through entrepreneurship all over again.” He added: “I’ve been telling our team not to be afraid to break down existing inefficiencies and rebuild from scratch. We’re making adjustments to align with our goal of tripling or quadrupling revenue over the next five years.”