Paris, September 14th, 2005 - Faiveley Transport, a company controlled by Faiveley SA and Sagard, has announced today that it has sold its 100%-owned German subsidiary Gutehoffnungshütte Radsatz GmbH (“GHH”), a high-end supplier of train wheels and wheel-sets, to funds managed by SG Capital Europe Ltd. (“SGCE”).
The enterprise value (before deduction of net debt) for the divestiture of GHH is €44m. The price consideration includes a vendor loan note of €5 million to be repaid in two instalments respectively in the third and fourth year following the transaction. The vendor loan note will bear an interest of 8% per annum (4% cash and 4% capitalized).
Faiveley Transport took the decision to divest GHH, a former subsidiary of Sab Wabco, a European leader in brake systems acquired by Faiveley Transport in November 2004, as there are limited synergies between the wheel activity of GHH and the range of products offered by Faiveley Transport which all relate to train-borne equipment.
Robert Joyeux, CEO of Faiveley Transport, declared : "We congratulate GHH’s senior management team for having delivered such outstanding performance over the recent years and wish them all the success they deserve in taking the company forward”.
GHH's management led by managing director Michael Walter and Ingar Jensen, former Chief Executive Officer of Sab Wabco and future head of GHH's advisory board have invested in the acquisition vehicle . SGCE will be investing from its recently raised third fund, SG Capital Europe Fund III LP. Acquisition finance facilities have been provided by the Bank of Ireland.
The completion of the transaction which is subject to approval of the German antitrust authorities is expected on 30 September 2005.
Rothschild and Hengeler Mueller advised Faiveley on this transaction. SGCE was advised by Pöllath + Partners.
About GHH, Faiveley SA, Sagard and SG Capital Europe
GHH
GHH is a profitable niche business with growing market shares. Over the last 3 years, GHH revenues have grown at a compounded growth average of about 4% in a stable market. Based on audited accounts for the year to 31st December 2004, the company reported a turnover of €48m.
FAIVELEY S.A.
Faiveley S.A. is one of the world's largest manufacturers of railroad equipment with its subsidiary Faiveley Transport which manufactures and sells five ranges of products: HVAC, electromechanics (doors, power collectors, etc.), electronics, brake systems and customer services. The company also makes plastic products for the cosmetics, automotive, and textile industries.
For the year ended March 31st, 2005, Faiveley S.A. had total revenues pro forma of the Sab Wabco acquisition of €652m.
SAGARD
Founded in 2002 by Power Corporation of Canada (Desmarais family), Sagard is a European mid-cap private equity specialist. Based in Paris, Sagard backs experienced management teams, who wish to develop their business and make them leaders in their market.
Sagard’s current investments include: AFE, Le Groupe Moniteur, Vivarte, HMY, Médi-Partenaires and CEPL.
SG Capital Europe
SG Capital Europe is a private-equity investor with over €500 million of committed capital, which invests in unquoted, medium sized companies in continental Europe. Apart from Société Générale, investors in the funds managed by SGCE include clients of Goldman Sachs, Stanford University Endowment and the Ford Foundation.
SGCE has offices in Paris, Munich, Milan and London and focuses on companies seeking to expand internationally and build leading positions in Europe. Current investments include AEB (I), Altice (F), Impression (B), Mühlhan (D), Lince (I), Sovitec (B), Unither (F).
Regulated information
Divestiture of GHH by Faiveley Transport
