Press Releases

Moeller Growth Leads to Buy-Out

UK-based private equity firm, Doughty Hanson & Co, has signed an agreement to buy Moeller Group for a price of €1,1-billion including pension liabilities and financial debt.

The purchase, from global private equity firm Advent International, follows a successful turnaround conducted on the basis of a consolidation strategy.

Moeller Group, represented in South Africa by wholly owned division Moeller Electric, is one of the world's leading suppliers of low-voltage power distribution and automation components, with major markets in the industrial, commercial and residential sectors, and consolidated sales of €870 million in the 2004/2005 financial year.

Sales in core operations increased from €670-million to €760-million year-on-year, while net financial debt was reduced to less than €50-million.

Moeller's turnaround followed a strategic refocus on core strengths, particularly the components business, and an ambitious plan to increase market share and take advantage of global growth markets.

Theo Kubat, CEO of Moeller Holding GmbH, reported recently from group headquarters in Bonn that double-digit revenue growth rates are being registered in core components.

"The group is enjoying substantial organic growth and achieving above average returns," he said.

"Together with Doughty Hanson, we will be using our extraordinarily good market position to pursue long term growth. In the process, we will continue to concentrate on the growth markets in Eastern Europe and Asia, where we will soon be opening further production facilities and sales offices."

A spokesman for Doughty Hanson said that the foundation for Moeller's excellence lay in high quality engineering, strong branding, a cutting-edge product portfolio, and a leading market position.

In terms of the purchase agreement, Doughty Hanson will be investing an initial €192-million, with investment bank Morgan Stanley underwriting an acquisition debt facility of around €650 million.

Doughty Hanson's acquisition of Moeller is line with a strategy of buying market leading, mid to large sized businesses. The private equity firm has a strong track record of working with engineering companies.

Announcing the acquisition, a spokesman for Doughty Hanson listed the following characteristics that had made the purchase of Moeller Group extremely attractive:

• A strong and experienced management team
• A quality brand with an excellent reputation for safety, reliability and good service
• High levels of product innovation and technological leadership in its markets
• A large addressable market estimated to be growing at 4,1% per annum, supported by increasing regulation and the significantly higher growth rates expected in emerging markets
• Barriers to entry and a stable competitive environment in Western European markets, with strong growth potential in Eastern Europe and Asia.

« Back