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Private Equity: Creating Value

Private Equity: Creating Value Contains case studies of German companies which are financed with private equity.

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Private Equity Investor Brief

PRIVATE EQUITY INVESTOR BRIEF German Private Equity - an attractive asset class for institutional investors.

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A Company AG: Registered office in Berlin, focus on Eastern Europe

Founded by Alexander van Dülmen at the age of 34, the film licensing business known as A Company Licensing & Consulting AG began in a small office on the sixth floor of an office tower at Alexanderplatz. ‘After being responsible for the Eastern European region on behalf of Kinowelt Medien AG for a few years, I decided to go independent in 2002 with the goal of developing my own sales network in Eastern Europe,’ said van Dülmen. ‘I soon started writing business plans and received a EUR 48,000 from the Berlin investment bank by the end of the year. Then I was ready to go.’

In 2003, along with two other shareholders – Tomasz Karczewski, CEO and majority shareholder of the Polish sales partner KinoSwiat, and Michael Schlicht, an executive at Sony Russia – Alexander van Dülmen built the platform for A Company’s film licensing network between Poland and Russia. Yet, like any independent venture, risks must be taken. ‘Once I received the loan, I headed for the American film market and acquired film rights to the tune of USD 3 million,’ van Dülmen recalled. ‘I knew I had three to four months in order to sell them at a profit. Otherwise I would have had to forget about my business concept. But it worked!’

Initially, further investment was difficult to come by. As the film licensing business of Central and Eastern Europe was considered a fairly new market, many financiers were reluctant. It took another two years for van Dülmen to convince additional investors of his expertise and business model. Finally, the private equity firm Mittelständische Beteiligungsgesell-schaft Berlin-Brandenburg GmbH (MBG) correctly assessed A Company. Within days, MBG invested EUR 250,000. ‘Without MGB, A Company would not exist in its current form today. They supported us as a driving force,’ said van Dülmen. There’s truth to that as the Berlin Volksbank followed suit, providing an additional EUR 400,000.

‘The Central and Eastern European film market grew tremendously over the last few years,’ said van Dülmen. It’s no doubt that A Company has been a vital player in creating such growth, as the company has generated consolidated sales of EUR 26 million in the past financial year. Furthermore, movie licenses have been valued at over EUR 25 million. Ultimately though, the core of A Company’s licensing business is the fine collection of cinematic stories that van Dülmen and his team invest in, acquire and distribute. After all, ‘the movie license business is more inspiring than trading in other things,’ said van Dülmen. Their library holds over 350 high-quality and entertaining films such as Kathryn Bigelow’s Oscar-winning film ‘The Hurt Locker,’ and Martin Scorsese’s ‘Shutter Island,’ which premiered at the 2010 Berlinale. Closer to home, A Company also distributes German films, such as Til Schweiger’s ‘Keinohrhasen’ and ‘Zweiohrküken’, to Eastern Europe and Russia.

Much like the Central and Eastern European film market, A Company has also experienced tremendous international growth, spreading itself across Eastern Europe with offices in Budapest, Prague and Moscow. However, the growth does not stop there. A Company no longer calls the sixth floor home. Instead, the company claims headquarters seven floors higher within the same building Alexander van Dülmen began writing his business plans eight years ago. A Company was once a one-man operation, but now exists as one of the leading film license companies with over 50 employees.