Gores partners Siemens in joint venture

The US billionaire’s latest European acquisition takes to $6bn the total enterprise value of its communications-related investment into the continent this year.

Gores Group, the US-based private equity firm backed by billionaire Alec Gores, has partnered with German electronics company Siemens to purchase 51 percent of Siemens Enterprise Communications. The deal brings to roughly $6 billion (€3.8 billion) the total enterprise value of Gores' 2008 European investments, all of which have centred around communications businesses.

Siemens and Gores will commit €175 million each to the joint venture, and Gores will also roll up two of its portfolio companies into the deal: Enterasys, a network security provider, and SER Solutions, a call centre software company.

“We have been looking for an opportunity to expand our presence in the enterprise networking and communications space and this partnership with Siemens provides the perfect fit,” said Alec Gores, founder and chairman of Gores.

A further €350 million will be invested between Gores and Siemens to fund product launches, the acquisition of new technologies and the firm’s further expansion into software and services provision.

The value of the Siemens joint venture, which will maintain Siemens branding but be controlled by Gores, has been reported to be in the region of $5 billion.

This is the third investment Gores has completed in 2008, all of which have targeted European assets.

In January Gores acquired French communications company Sagem for €383 million. In March Gores teamed up with Israeli investment company Mivtach Shamir Holdings to complete a $475 million all-cash acquisition of Gilat Satellite, an Israeli satellite communications operator.