Bayard swoops for KKR’s Landis+Gyr

US private equity firm Kohlberg Kravis Roberts has signed an agreement to sell Swiss electricity metering firm Landis+Gyr to Australia’s Bayard Energy.

Landis+Gyr, a Zug-based company specialising in the design, manufacture and distribution of electricity meters, has been sold by Kohlberg Kravis Roberts (KKR) to Australia’s Bayard Energy.

The consideration was undisclosed, but was reported by sources close to the deal to be between €100 million ($124 million) and €150 million ($186 million). The deal is subject to regulatory approvals and is expected to complete by the end of September.    

The deal represents KKR’s second divestment from the portfolio of assets known collectively as Demag Holding, in which it acquired an 81 percent stake from Germany’s Siemens in 2002 (Siemens retained 19 percent). The previous divestment occurred just last week when it sold Stabilus, a German maker of gas springs, to the UK’s Montagu Private Equity for an undisclosed sum.

The deal is the second completed by Bayard Energy, the energy management and conservation division of Sydney-based holding company Bayard Capital, since it was set up last year by former APN News and Media chief executive Cameron O’Reilly

Bayard’s shareholders include his father, the Irish media magnate Tony O’Reilly, as well as a group of business leaders in Australia and New Zealand, including Kerry Stokes, Douglas Myers and John Fairfax.

Coinciding with the acquisition of Landis+Gyr, DB Capital Partners, the private equity arm of Deutsche Bank, has taken a “substantial” shareholding in Bayard Capital. Deutsche Bank advised Bayard on the deal, while National Australia Bank and CSFB jointly arranged debt financing.

A source close to Bayard told PrivateEquityOnline the presence of DB as a major shareholder was a “signal of serious intent regarding Bayard’s future growth plans”. The same source said Bayard was a “strategic” rather than “financial” investor and had no plans to raise a fund. 
     
Following the deal, Bayard will combine Landis+Gyr with Ampy Email Metering, the electricity and gas metering specialist with operations in Australia and the UK, which it acquired in August 2003 from Smorgon Steel and OneSteel, the Australian steel companies.

“Landis+Gyr has an unsurpassed reputation for technical excellence and the largest research and development commitment in the industry,” said Cameron O’Reilly in a statement. “Combining it with Ampy Email…we will create a force with critical mass and global reach in the rapidly growing market for smart metering.”

The combined business, which will be based in Zug, will have more than 3,500 staff in 27 countries and annual sales of around €450 million.

Demag Holding was established as a holding company for seven businesses acquired by KKR from Siemens in July 2002 for €1.7 billion. Among the five remaining businesses are Demag Cranes & Components and Gottwald, a harbour cranes specialist.