Agic on Sunday said it had agreed to acquire Gimatic, an Italian supplier of robotic end-of-arm tools valued at between €100m and €150m. It did not disclose a specific price.

 

Agic was founded by former Deutsche Bank executive Henry Cai, a veteran dealmaker who started Agic with the goal of “shaping smart industries”, focusing on the so-called fourth industrial revolution, in automation and connectivity.

 

Its Gimatic deal is its first as a sole acquirer, but it was a member of the consortium — led by China National Chemical Corp — that purchased KraussMaffei Group for €925m in January. KraussMaffei, a specialist producer of plastics and rubber, is one of Germany’s largest machinery suppliers. Its sale was, at the time, the biggest-ever Chinese acquisition of a German company.

 

While the acquisition of Gimatic is relatively small, it plays into a growing theme of Chinese investment in automation, following last month’s offer from Midea, the Chinese home appliance maker, to purchase German robotics company Kuka.

 

That deal valued the business at €4.6bn but led some government officials to worry about protecting German technology. Economics minister Sigmar Gabriel has been trying to put together a German or European consortium to offer a counterbid.

 

Gimatic, founded 31 years ago, has been growing its sales by more than 20 per cent a year for the past three years, with four-fifths of its business stemming from Europe. Asia accounted for less than a tenth of sales but is seen as the market with the greatest potential.

 

Agic’s strategy is “top-line growth through internationalisation,” said Heiko von Dewitz, Agic’s Munich-based managing partner. “In the past [Gimatic] has been more margin than growth focused — we’re going to change that a bit.”

 

Its deal for Gimatic aligns with the industrial strategy spearheaded by Beijing last year to upgrade infrastructure, make China less dependent on manual labour and become a tier-one player in manufacturing.

 

“Fifty per cent of the global growth in industrial automation and robotics is in China,” said Mr von Dewitz. “Depending on the sources you look at, the global automation market is growing at 10 to 15 per cent. China is growing at 20 per cent. That gives you an idea of how much momentum there is.”

 

He said there is a huge opportunity for European technology companies to expand into China. But while the big companies have figured it out, companies with between $30m and $150m in revenue are further behind. “They know China is a strategic must, but they don’t know how to tackle it,” he said.

 

Chinese companies have offered to buy 119 European companies this year, for a total market value of €72bn — more than double the €33.5bn value from all of 2015, according to Dealogic.

 

Last year, Italy was the number one destination in Europe for Chinese acquisitions, as 14 companies were acquired for a total value of €10.6bn, Dialogic data shows. Gimatic is the ninth Italian company to be purchased this year.

 

Mr von Dewitz, an electrical engineer by training, called the acquisition a “classic leveraged buyout,” with the founder and chief executive also reinvesting in a substantial minority stake. He said Agic is likely to do another one or two deals this year.

 

“If you look at the small and mid-cap sector, you find a lot of hidden champions that focus on certain technologies and solutions,” he said. “They have become market leaders but they are still small and mid-cap.”