MGE UPS Systems is back under the ownership of Schneider Electric after eight years and two private equity-backed buyouts. Legal & General Ventures and ABN AMRO Capital sold their stake in the secured power company in a deal worth €298m. The buyer, Schneider Electric, already owned a 32.3% interest in the company, which is the leading European provider of uninterruptible power supply equipment. The transaction should be completed in the first quarter of 2004, pending approval by anti-trust authorities in the US and Europe.
LGV and ABN AMRO acquired MGE UPS Systems in May 2000 via a FFr4.9bn (€750m) secondary buyout from Europe Capital Partners, which backed the original buyout from Schneider Electric in 1996. The company retained a 15% stake in MGE UPS Systems following the first deal and increased this after the second buyout.
In the current deal Schneider is acquiring a 52.6% interest, representing all of the private equity groups’ stake and half of the interest held by MGE UPS Systems’ management and employees. Schneider believes that maintaining share ownership will promote the achievement of ambitious growth objectives for the company but has agreed to acquire management’s remaining 15.1% stake in 2006 for a price based on the company’s EBITDA level in 2005. The assumption of €283m in debt and Schneider Electric’s existing interest in the company give an enterprise value of €850m.
MGE UPS Systems operates in 100 countries, employing 2,900 staff and generates sales of nearly €500m with an operating margin above 12%. The company designs, manufactures and services a wide range of uninterruptible power supply systems that protect computers and other sensitive electronic equipment against electrical power distortions and interruptions. The company’s products include Uninterruptible Power Supplies (UPSs), inverters, rectifiers, power management software, active harmonic conditioners and surge suppressers. The main applications are for the IT and telecoms industries.