Private Equity News & Analysis

Wendel to acquire Deutsch Group for $1bn

French listed investment house Wendel Investissement has made its first primary acquisition outside of France with the $1.04bn purchase of US-based connectors business, Deutsch Group.

By
Robert Venes
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French listed investment house Wendel Investissement has made its first primary acquisition outside of France with the $1.04bn purchase of US-based connectors business, Deutsch Group.

Paris-based investment firm Wendel Investissement has agreed to acquire US-based Deutsch Group, a provider of connectors used in aeronautics, defence, heavy vehicles and oil exploration, for $1.04 billion (€829 million).
 

We now have an investment team that is strong enough to be able to look at opportunities both in and outside of France.

Jean-Bernard Lafontra, CEO, Wendel Investissement

Wendel will provide $350 million in equity in the transaction and will own 89 percent of the acquisition vehicle, with Deutsch Group management holding the remainder.
 
Wendel was advised by Lazard Frères, Linklaters, O’Melveny & Myers, Ernst & Young, Bain & Company, Environ and Aon on the transaction. Financing was provided by the Royal Bank of Scotland and JP Morgan.
 
Closing of the transaction is conditional upon the approval of the Committee on Foreign Investment in the United States (CFIUS) and the US, French and German competition authorities.
 
Jean-Bernard Lafonta, CEO of Wendel, said in a conference call that the acquisition showed the firm’s willingness to extend its investment strategy abroad. “We now have an investment team that is strong enough to be able to look at opportunities both in and outside of France,” said Lafonta.
 
Founded in the US in 1938, Deutsch Group is currently present in 25 countries, with main markets in the US, France and Great Britain. The company employs 3,500 staff worldwide, through ten production sites, and reported turnover of $500 million in 2005.
 
Lafonta added that Wendel plans to maintain the company’s focus on organic growth as well as consider some bolt-on acquisitions.
 
Last month, Wendel reported that, following the 30x oversubscribed flotation of French electrical equipment manufacturer Legrand and the purchase of building materials company Materis in a €2.1 billion transaction, it would have approximately €1 billion available for acquisitions.