Sagem Communications (France) - Dec 2007

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01 December 2007

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US private equity firm The Gores Group has backed the spin-off of Sagem Communications from listed electronics, aerospace and defence group Safran, in a deal valuing the business at €383m. Gores acquired a majority stake in the company in exchange 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.

Sourcing

The Gores Group had originally approached Sagem Communications’ CEO 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.

Financing

GE Capital is said to be in negotiations regarding the provision of a debt package to support the buyout, but no further details have been disclosed.

Company

Paris-headquartered Sagem Communications manufactures terminals for faxes and digital television set-top boxes and broadband terminals. The company employs 6,500 staff and generated revenues of €1.267bn in 2006. Growth is expected to be achieved by both organic and external means.

People

Steve Yager and Fernando Goni negotiated the deal for The Gores Group. Patrick Sevian is Sagem Communications’ CEO.

Advisers

Equity - August & Debouzy, (Legal)Equity - BCG, (Other Due Diligence)Management - Aforge Finance, (Corporate Finance)Vendor - Landwell, Jean Vicensini, Xavier Etienne (Tax)Vendor - PricewaterhouseCoopers Transaction Services, Hélène Farouz (Financial Due Diligence)Vendor - Rothschild & Cie, Christophe Desprez, Nicolas Bonneau (Corporate Finance)Vendor - UBS , François de Combret (Corporate Finance)Vendor - Weil Gotshal & Manges, (Legal)