Private Equity Funds Go Shopping in Europe

Article excerpt

New York-based private equity firm clayton, Dubilier & Rice, in its third European acquisition of 2004, led a group that agreed on November 30 to buy electrical equipment supplier Rexel from France's Pinault-Printemps-Redoute in a deal expected to be valued at $4.97 billion.

The transaction was the largest leveraged buyout of the year-to-date in Europe at the time. The proceeds will enable PPR, which owns the Gucci and Yves Saint Laurent brands, to pay down almost $4 billion in debt and to focus on the luxury goods and retail markets.

Private equity funds are buying up non-core businesses of European companies that are restructuring to improve their balance sheets.

European buyout activity as of December 1,2004, already had reached a new peak, some 12% higher than the record $109 billion for the full year 2003, according to Dealogic.

The Rexel acquisition teamed Clayton, Dubilier & Rice with Eurazeo, France s largest publicly traded buyout firm, and Merrill Lynch Global Private Equity.

Michel David-Weill, chairman of Lazard, the world's largest privately held investment bank, also is chairman of Eurazeo.

The trio of private equity firms signed an exclusivity agreement with PPR to acquire the 73.5% of the Rexel shares that PPR controls and to assume $1.5 billion in debt.

The group also will offer to acquire the remaining shares in Rexel held by the public, according to attorneys at Debevoise & Plimpton, which has represented clayton, Dubilier & Rice for more than 25 years and has assisted the buyout firm on all of its European acquisitions.

Rexel, which makes electrical switches, plugs and cables, has more than 21,000 employees and operates in 29 countries. Its Dallas, Texas-based subsidiary is the fourth-largest electrical distributor in the US. …