KKR close to Siemens assets

The US private equity firm is in advanced talks regarding the purchase of several engineering units as it closes the E3.7bn acquisition of Legrand.

German industrial group Siemens is planning to dispose of a several of its non-core engineering units to US private equity house Kohlberg Kravis Roberts (KKR), according to a report on Reuters.

Siemens had said earlier this year that it was looking to dispose of up to 50 businesses that it considered to be outside of its core telecom activities. The assets have a total book value of around E2bn with sales in the region of E3.5bn. Reuters reports that an announcement on the deal could be made ‘within days’.

Siemens is keen to divest a portfolio of operations that it acquired following its purchase of Mannesman Atecs last year as well as its minority stake in tank manufacturer Krauss Maffei Wegmann. The companies are Stabilus, Gotwald, Mannesmann Plastics Machinery and Demag Cranes and Components. Late last year, Apax shelved plans to acquire Mannesmann Plastics Machinery for $740m following the publication of worse-than-expected performance figures which led banks to pull out of the deal.

Kohlberg Kravis Roberts is currently making considerable inroads into the European industrial market. The firm has just completed a deal with Schneider Electric to acquire French electronics components manufacturer Legrand. The E3.7bn price tag, coupled with assumed debt of E1.4bn, makes it Europe’s largest LBO.

KKR’s offer sees the firm team up with French firm Wendel Investissements. The consortium beat off competition from rival private equity consortia including PAI Management and CVC Capital Partners and BC Partners which joined with Cinven.

The Legrand deal is likely to complete ahead of Diageo’s sale of Burger King, which has now entered the final stages with Texas Pacific believed to be in the driving seat. Texas Pacific has joined forces with Goldman Sachs Capital Partners and Bain Capital to make an offer of around $2.35bn.