Gores beats Permira, AXA and Francisco to Sagem

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In a deal valuing the business at EUR383m, US private equity firm The Gores Group has overcome six weighty rivals to back the spin-off of Sagem Communications from listed electronics, aerospace and defence group Safran.

Gores had originally approached Sagem Communications' CEO a long time ago about a possible leveraged buyout and was therefore well placed when Rothschild and UBS were mandated to run a wide auction. Six bids were submitted, notably from Permira and AXA Private Equity. In the final round, Gores defeated UK-based technology-focused private equity firm Francisco Partners. GE Capital is said to be in negotiations regarding the provision of a debt package to support the buyout, but further details have yet to be disclosed.

Gores acquired a majority stake in the company in exchange for the investment it made via its fund Gores Capital Partners II. A large number of managers and staff are to be given the opportunity to invest in this buyout, which is expected to complete in early 2008.

Paris-headquartered Sagem Communications manufactures terminals for faxes and digital television set-top boxes and broadband terminals. The company employs 6,500 staff. (Page 40).