TAC sale nets strong exit for EQT

The Nordic private equity house has sold building technology company TAC to Schneider Electric for E420m, achieving a ten-fold return on its initial equity investment in 1998.

EQT Partners, the Swedish private equity house, has sold integrated buildings systems supplier TAC in what is the firm’s third exit of 2003.

 

German electric group Schneider Electric has agreed to pay approximately SKr4bn (E420m) in cash for the business just over five years after the EQT Scandinavia I fund bought it. At the time EQT invested SKr150m (E16m) of equity in the SKr380m acquisition.

 

TAC is a provider of information technology to the construction industry. Based in Malmö, Sweden, it has 2,100 employees and operations in more than 70 countries. In 2002, the company recorded sales of nearly E350m and an operating income of 10.5 per cent. TAC has enjoyed remarkable growth over the past few years and is one of the most profitable companies in its industry.

 

Following TAC's acquisition of US-based CSI in autumn 2000, the EQT Scandinavia II fund entered as a new shareholder, investing a further SKr640m. During EQT's ownership TAC has pursued a growth strategy, acquiring companies in the US, Denmark, Norway and Finland. The strategy has allowed TAC to develop from a regional company into a global operation in information technology for building management.

 

“The sale of TAC is a fantastic exit for EQT,” said Thomas von Koch, partner at EQT Partners. “We have made more than a ten-fold return on the investment from Fund I”, he said, adding that under EQT’s stewardship, TAC’s profit increased from SKr45m in 1998 to its current level of SKr380m. During the same period, TAC’s turnover quadrupled, reaching SKr3.15bn in 2002.

 

The deal is EQT’s third exit in 2003, following the sale of Nordic Info Group in January and, more recently, the sale of Stenqvist to Triton in April. “We are pleased to have completed these exits in a time when the market remains difficult,” added von Koch. “It’s a perfect time for buyers. Exits are a lot tougher, although the market is likely to pick up over the next two years.”

 

EQT Partners is planning to complete a fourth exit later this year with a rare foray into the public markets. Plantasjen Group, the Norwegian garden equipment store chain acquired by EQT in September 2001, is planning to seek a public listing later this year. “We are aiming for an autumn flotation of the business, if the market allows.”

 

Completion of the TAC transaction is subject to approval from the relevant competition authorities.