LBO France and Barclays Private Equity have sold their investment in French power conversion engineering company Converteam to GE for $3.2bn (€2.2bn).
Converteam specialises in the supply of systems and equipment that convert electrical energy into mechanical energy, such as drives, controls, motors and generators. Its markets include marine and offshore, metals processing, oil and gas and renewable energy and it has operations in 80 countries, including France, Germany, the UK, the US, Brazil and India. The company employs 5,300 people and in 2010, sales totalled €1.1bn and Ebitda ¤166m.
Barclays Private Equity acquired Converteam (formerly Alstom Power Corporation) in 2005 and launched a sales process for the business in 2008. Bidding was fierce, attracting interest from 3i, Eurazeo and General Electric. At the time, LBO France acquired a third of the business, with Barclays retaining a third and the remainder held by management and employees in a deal that valued the business at €2bn.
The deal was closed in September 2008, despite the bankruptcy of Lehman Brothers, which had been leading the debt syndication.
Before the deal closed, it sparked controversy in France over executive pay in private equity-backed companies. The deal triggered a €700m payout to the company’s top eight managers. Barclays offered each of the company’s 5,000 employees the equivalent of two months’ salary.
The GE deal sees the buyer acquire a 90 per cent stake in the business, with management retaining the remaining ten per cent.
LBO France and Barclays Private Equity were unavailable for comment.