Alstom Contracting in E770m MBO

Backed by CDC Equity Capital and Charterhouse Development Capital, the electrical engineering business will be trading independently under the revived name of Cegelec.

Alstom Contracting, the electrical engineering and services division of the Alstom Group, has announced it is being bought out by its management to become a fully independendent business.

The division will assume the brandname of Cegelec, the original name of the business that was acquired by Alstom in 1998.

In what is one of Continental Europe’s largest industrial MBO, equity capital is being provided by Charterhouse Development Capital and CDC Equity Capital. Cegelec’s management also participated.

Debt financing for the deal, which has a transaction value of E770m, will be arranged by BNP Paribas as global lead arranger and the Royal Bank of Scotland.

Cegelec will be run by Claude Darmon and Jacques Gounon. Darmon, Cegelec’s future chairman, said: “this new freedom will allow us to be much more responsive to our clients, aided by our extensive office network. I am very confident in the growth capacity of this wonderful business.”

Darmon’s sentiment was echoed by Gordon Bonnyman, chief executive of Charterhouse: “Our deals are not about excessive leverage and cost cutting, they’re about growing businesses. When we saw Darmon and Gounon, we realised they were very much the people to back, and we’re really looking forward to be working with them.”

Working capital will be made available as and when opportunities to grow the business arise. In a statement, Cegelec said the firm’s growth plans were focused on three elements: “increasing technological capabilities, focusing on services activity, and expanding its world-wide presence from its leading position in Europe.”

Cegelec reported a pro-forma turnover in 2000 of E2.6bn. It operates in over 20 countries worldwide and has around 25,000 staff.

The deal is awaiting completion subject to conditions and regulatory approval. Likely completion date is June 2001.

Charterhouse’s most recent involvement in France was the acquisition of Holding de Restaurant Concedee, the French motorway restaurant chain and catering concession group acquired from Ahold.

CDC Equity Capital is a subsidiary of CDC Ixis specialising in LBO acquisitions which exceed E100m in value.