CDC Equity Capital and Charterhouse Development Capital have backed the MBO of Alstom Contracting in a deal worth euro770 million. The division of Alstom responsible for electrical engineering and services will be known as Cegelec. The transaction, France’s biggest buyout since the Picard Surgeles mega-deal, was supported by debt provided by BNP-Paribas (global lead arranger) and Royal Bank of Scotland.
The name Cegelec comes from a company acquired by Alstom in 1998. The other sectors of Cegelec were integrated into Alstom but the contracting division – the subject to this buyout – remained a non-core business. Cegelec, which employs 25,000 people in more than 20 countries, reported a pro-forma turnover of euro2.6 billion last year.
Claude Darmon, chairman, and Jacques Gounon will manage the company and are planning growth through increased technological capabilities, focusing on service activity and expanding Cegelec’s worldwide presence. Darmon said: “This new freedom will allow us to be much more responsive to our clients, aided by our extensive office network. In order to bring them the best solutions, we are going to speed up the development of our range of services.” The company’s employees will be incentivised through an equity participation.
The equity portion of the transaction was approximately euro254.1 million, which was provided 50:50 by CDC and Charterhouse. BNP Paribas and Royal Bank of Scotland supplied senior debt of euros211.75 million each and BNP in London underwrote euro92.4 million of mezzanine funding.
This is CDC Equity Capital’s seventh investment since its establishment in 1998. The company, a subsidiary of CDC Ixis, recently made its first exit from MC International through a trade sale. Cegelec is the first commitment from the company’s second buyout fund, which aims to raise euro400 million by the end of the year. CDC also invested through its first fund CDC Enterprises.
Advisers on the deal were Merrill Lynch (Alstom), Ashurst Morris Crisp and PricewaterhouseCoopers (CDC and Charterhouse). Completion of the deal is expected in June.