Recently, FLSmidth, a Danish multinational giant with a history of 130 years, suddenly announced a major strategic adjustment: it sold its cement business to a subsidiary of Pacific Avenue Capital Partners, a private equity firm, for 150 million euros (about 1.16 billion yuan).
FLSmidth, founded in 1882, is a well-known multinational company in the world cement equipment industry, providing a complete set of cement technology and equipment and high-quality engineering services, with a history of 130 years. It has four major technical centers in Denmark, the United States and India, and has branches or offices in more than 50 countries around the world, with more than 13,000 employees worldwide. So far, FLSmidth has provided nearly 2400 cement kilns, more than 4500 pulverizers, and more than 10,000 sets of other special cement equipment to cement plants all over the world.
It is understood that on June 20, 2025, FLSmidth announced that it had reached an agreement to sell its cement business to an affiliate of private equity firm Pacific Avenue Capital Partners for 150 million euros ( $172.8 million). Commenting on the 140-year history of FLSmidth's cement business
, FLSmidth Chairman Mads Nipper said, We firmly believe that this divestiture is a key step in unlocking the full potential of our mining and cement businesses. Our cement business is now well positioned for future success. "This divestiture allows us to focus more on our core mining business, making FLSmidth a pure leader in the mining industry,"
said FLSmidth CEO Mikko Keto. With a clear and focused mining strategy, we are confident that we can create long-term value for our customers, shareholders and other stakeholders and enhance our competitive position. A few days before
the cement divestiture, FLSmidth announced the sale of its headquarters office and plot in Valby, Copenhagen, Denmark, for 730 million Danish kroner ( $112.7 million). The company has been based in Valby since 1899. Its iconic red brick building, designed by architect Palle Suenson, was inaugurated in 1956. The company's new corporate headquarters will be located in Havneholmen, Copenhagen, and is currently scheduled to move by the end of 2025.
It is reported that the sale of business to Private Equity (PE) companies is generally an important step before the formal divestiture of assets, and the divested assets will be sold to PE funds, rather than strategic buyers or original management, which has the strategic significance of rapid and efficient exit, optimization of valuation and transaction structure.
PE is familiar with complex transaction structures (such as leveraged buyouts, installment payments, betting terms) and can help the parent company achieve more favorable transaction arrangements. Some PE is willing to accept assets with temporary poor performance but great potential and enter the market at a reasonable price. Under the leadership of PE,
the divested business will often get new management resources, capital injection and business remodeling opportunities to achieve "reborn" growth. For the parent company, it also retains some form of cooperation space in the future (such as supply chain, joint investment, etc.). Compared with strategic buyers, PE usually does not compete directly with the parent company in the main business, and the synergy or conflict after divestiture is smaller. However, PE is not a pure buyer, and its focus includes improving operational efficiency: improving profitability through cost control and organizational adjustment. PE is generally held for 5-7 years, and capital returns are realized through IPO or re-sale.
Pacific Avenue Capital Partners ( "Pacific Avenue") is a Los Angeles, California-based private equity firm focused on mid-market corporate divestitures, spin-offs and other complexities. Through M & A and operational experience, and unlocking value through operational improvements, capital investments, and accelerated growth.
Pacific Avenue takes a highly collaborative approach, working with management teams to align strategies, make necessary investments, and help businesses realize their full potential. FLSmidth's cement business has a good synergy with domestic cement engineering giants. Both parties have cooperated for many years in the domestic and international markets, especially in the fields of precision machinery, industrial control software and service business, which are highly complementary. At the same time, domestic engineering giants also have international competitors and buyers.
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