Cinven has realised its final mid-market investment through the sale of electrical group, Electrium, to LDC (formerly Lloyds Development Capital) in a £38m secondary buyout.
Cinven acquired the UK business in April 1997 when it backed the £135m management buyout of Hanson Electrical. Since 2000 Electrium has undertaken a programme of radical changes, achieving the lowest cost base in the industry and establishing a number of brands. The Electrium factories have been modernised as part of a £19m programme including a number of significant automation projects.
Martin Draper, director of LDC, said: “The management of Electrium has reshaped the cost base of the business to compete profitably in its marketplace and has successfully managed the rationalisation of its manufacturing base. We have no doubt that the team will continue to capitalise on this restructuring and will deliver significant capital gains over a two to three year time frame.”
Electrium is one of the UK’s leading suppliers of electrical wiring accessories and domestic circuit protection products, offering a complete range of low voltage installation products, from a switched socket to the main switchgear in an industrial installation. The company, whose brands include Wylex, Crabtree and Volex, generated a turnover of £63m in the year to March 2003. Its customer base is primarily electrical wholesalers and large retailers. Electrium employs around 800 staff and has manufacturing operations in the UK and throughout the world, with its head office in the West Midlands.
Going forward, Electrium’s management and the company’s new investors will focus on key growth drivers in the sector, such as new build, public sector and industrial markets. Martin Draper and Andy Lyndon (also of LDC) will join the board of Electrium as non-executive directors.
Since the time of the Hanson buyout Cinven has shifted its investment focus upstream. The firm is now investing its €4.3bn fund, with deal sizes equally likely to be in billions as millions.