Case Studies

In May 2000 LGV co-led the buyout of MGE UPS Systems, the leading European provider of uninterruptible power supply equipment, was the subject of a secondary management buy-out for FFr4.9bn, acquired from Europe Capital Partners. LGV and ABN AMRO Investissement invested a total of FFr900m new equity, while Schneider Electric and the management team of the company reinvested to increase their stakes from 15% and 14% respectively, to a holding of a third each in the new company. A FFr2.5bn senior debt package was provided by BNP Paribas, while ICG provided a FFr600m mezzanine strip.

The company, which is based in Grenoble, has 2,800 employees, with operations in France, the US and China. It designs, manufactures and services a wide range of uninterruptible power supply systems which protect computers and other sensitive electronic equipment against electrical power distortions and interruptions. The main applications are for the information technology and telecom industries.

Schneider Electric acquired the majority shareholdings in MGE that it did not already own in February 2004.

The sale enabled LGV funds to almost double their investment and generate a satisfactory IRR. It demonstrates the benefits of the partnership approach adopted between financial investors, trade players, management and employees in a buyout, which has been a feature of a number of recent investments led by LGV.