Bonn, Germany—Advent International reports that it’s selling Moeller Group to U.K.-based Doughty Hanson & Co. for 1.1 billion euros, including pension liability and financial debt.
Bonn, Germany— Advent International reports that it’s selling Moeller Group to U.K.-based Doughty Hanson & Co. for 1.1 billion euros, including pension liability and financial debt. The transaction is subject to regulatory approval and is expected to close in August 2005. Advent and Doughty Hanson are both private equity firms. Advent will consider reinvesting a portion of its sale proceeds in Moeller following the close of the transaction.
Moeller is one of Europe’s largest suppliers of low-voltage electrical distribution and automation components for industrial, commercial and residential use. It reportedly has undergone a successful corporate turnaround since Advent acquired it December 2003. Though it traditionally had strong market positions, a portfolio of high-quality products, and an excellent customer base, Moeller reportedly had experienced frequent management and strategy changes, a lack of financial transparency, and over-diversification, leading to significant losses.
Advent adds that Moeller exemplifies one of its key buyout strategies: to focus on improving the performance of businesses through strategic restructuring. After the 2003 acquisition, Advent says it worked closely with management and two of Advent’s operating partners to develop a value-creation plan focused on refocusing Moeller on its core components business. Within the first 12 months of its ownership, Advent reports that its strategic disposal program delivered more than 100 million euros in cash, and the company returned to operating profitably. Moeller’s remaining core business subsequently generated an organic growth rate of some 14%, compared to an industry average of 4-5%, and has paid down its net financial debt to less than 50 million euros as of its fiscal year that ended in April 2005. In its core business, the company generated revenues of 760 million euros in 2004-05.
‘Since Advent International invested in the business, Moeller has staged an incredible finan-cial recovery. We were significantly loss-making two years ago, and today we are enjoying double-digit sales growth rates,” says Theo Kubat, CEO of Moeller Holding GmbH. “Doughty Hanson’s investment will help us to solidify our market-leading position and support a long-term growth strategy by capitalising on opportunities in Eastern Europe and Asia.’
Claus Felder, of Doughty Hanson, adds that, “’High-quality engineering, strong brand names, a state-of-the-art product portfolio, and leading market positions are some of the key features which make Moeller an excellent company. We look forward to working with management to further develop Moeller’s key strengths and to take advantage of existing growth opportunities in Eastern Europe and Asia.’
Control Engineering Daily News Desk
Jim Montague, news editor
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