Platinum’s largest European deal to date

The US buyout firm has agreed to buy the European distribution operation of the French telecommunications giant Alcatel.

Platinum Equity, a US buyout firm, has agreed to buy the European distribution operations of Alcatel, the French telecommunications group for an undisclosed sum. The unit, estimated to be worth up to E1.5bn, will form the base for the expansion into Europe of one of Platinum’s portfolio companies.

The deal is Platinum’s largest foray into the European market to date, and is hoped will bolster the European operations of portfolio business NextiraOne, a network operator offering integrated voice, data and internet services across North America.

Tom Gores, CEO of Platinum Equity, said the acquisition was a significant step in the firm’s strategy to build a portfolio of international voice and data network solutions providers. “As there are no overlaps in regions served or operations, Alcatel's enterprise distribution and services business is an excellent complement to NextiraOne,” he said.

Alcatel's European distribution operation has 6,500 employees and more than 400,000 potential customers across 17 countries. NextiraOne will distribute Alcatel’s enterprise voice and data products in the US. Platinum expects the combined businesses to record E2.8bn of revenue this year.

Platinum Equity concentrates on buying and global technology companies, and since the company's founding in 1995, has completed more than 30 deals with companies such as Motorola, Fujitsu and IBM.

Platinum Equity's portfolio has an enterprise value of around $2.5 – $4bn and includes 25 operating companies with offices in 11 countries and an infrastructure in over 100 countries. The companies with European operations include Vanguard Managed Solutions and Gupta Technologies.