LDC buys Cinven’s Electrium

UK mid-market private equity firm LDC has agreed to back a £38m secondary management buyout at UK electrical group Electrium, providing an exit for Cinven.

Lloyds Development Capital (LDC), the UK-based mid-market firm, has backed a secondary management buyout of Electrium, the electrical group based in the West Midlands.

The deal values Electrium at £38 million (€55 million; $70 million) and provides an exit for Cinven from the business it backed in 1997. The business has underperformed under the stewardship of Cinven, which paid £135 million (€194 million; $247 million) to Hanson plc for the business, formerly known as Hanson Electrical.

In 1996, Hanson Electrical's sales amounted to £145 million (€208 million; $265 million) and operating profits were £13.4 million (€19.3 million; $24.5m). In the year to March 2003, Electrium reported turnover of £63 million (€91 million; $115 million).

Electrium supplies electrical wiring accessories and domestic circuit protection products and produces seven of the leading brands in the electrical industry, including Wylex, Crabtree and Volex. The company employs around 800 staff and has manufacturing operations in the UK and throughout the world, with its UK head office in Brownhills. 

“The management of Electrium has reshaped the cost base of the business to compete profitably in its marketplace and has successfully managed the rationalisation of its manufacturing base,” said Martin Draper, director at LDC. “As a result of their actions over the last two to three years, the business is well positioned to capitalise on the power of its brands.”

The Electrium management team was advised by Browne Jacobson and Ernst & Young, whilst LDC was advised by Wragge & Co and Deloitte.

LDC’s most recent deal saw the mid-market firm lead a £60m (€86 million; $110 million) public-to-private buyout of Stirling Group, the UK-listed clothes retailer which supplies goods to the Marks & Spencer group.