KKR completes Legrand deal

The KKR-backed Wendel Consortium has agreed to pay E3.63bn for French electronics components firm Legrand.

US private equity firm Kohlberg Kravis Roberts has sealed the E3.6bn deal to acquire Legrand from Schneider Electric. The price tag includes a loan note of E150m from Schneider.

The sale was forced upon Schneider last year following objections from the European Union on its E5.7bn acquisition of Legrand in January 2001, questioning the impact the deal would have on competition in the European market.

The agreement between the two parties includes a deal to annul the transaction in the event of the original anti-trust decision being overturned by the Tribunal de Première Instance in October, subject to a E180m break-off fee payable to Wendel.

The Wendel Consortium, which consists of Wendel Investissement and Kohlberg Kravis Roberts, has arranged debt financing for the acquisition from Credit Suisse First Boston, Lehman Brothers and The Royal Bank of Scotland. A spokesperson for KKR refused to comment on the exact financing arrangements, although the Financial Times reports that E2.2bn is being provided in bank debt and another E600m in high-yield bond financing.

The sale of Legrand, which has 27,000 employees in 54 countries and a debt pile of E1.4bn, is due to close in the fourth quarter of 2002. The E3.6bn-plus price tag makes it one of Europe’s largest ever LBO transactions.

The sale was coordinated by Merrill Lynch.

The deal is the second in a week to be completed by KKR, following the acquisition of a portfolio of engineering businesses from Siemens on Friday for E1.7bn.