Fresh from the successful exit of RHM (see page 12), Doughty Hanson has acquired a majority stake in Moeller Group, one of Europe’s largest suppliers of low-voltage electrical distribution and automation components, for €1.1bn. The price includes pension liabilities and financial debt.
Moeller is headquartered in Bonn and generated sales of €760m in its core business in the financial year to April 30 2005.
Doughty Hanson will invest €192m in equity to take control of the business in a secondary buyout from Advent. Moeller’s management will retain a minority stake, as might Advent. Mizuho and Morgan Stanley are underwriting an acquisition debt facility of about €650m, according to Doughty Hanson.
The acquisition is Doughty Hanson’s fifth from its latest private equity fund, Doughty Hanson & Co IV. Including this transaction, Doughty Hanson will have invested a total of €617m of equity in Fund IV portfolio companies.
Advent said it would consider reinvesting a portion of its sale proceeds in Moeller following the close of the transaction.
Moeller has undergone a corporate turnaround since Advent acquired the business in December 2003. Prior to the buyout, Moeller had experienced frequent management and strategy changes, a lack of financial transparency and over-diversification, leading to significant losses.
Within the first 12 months of Advent’s ownership, a strategic disposal programme delivered more than €100m in cash proceeds, and the company returned to operating profitability. The remaining core business has since generated organic growth of 14%, against an industry average of 4%–5%.