In December 2002 French investment office Wendel and Private Equity firm KKR acquired Legrand, a global leader in low-voltage electric products, in a €4.8 billion leveraged buyout. The deal, the largest-ever LBO in Europe at the time, was the result of a forced divestiture by competitor Schneider Electric, whose attempt to merge with Legrand was blocked on antitrust grounds. The case describes in great detail the financing structure put in place by the buyers, which was considerably complex and involved different types of equity and debt securities issued by several corporate entities. The case has two primary pedagogical objectives for students: first, the analysis and modelling of debt capacity, second, gain exposure to key aspects of deal structuring and how the latter can maximize transaction value for investors. Both of these objectives are meant to familiarize students with the mechanics and the challenges involved in financing a deal of this size. Link to the article
GASPAR, J.M. and CARRICK, A.M. (2010). Legrand: a chance LBO. ESSEC Business School.
Keywords : #Leveraged-buyout-(LBO), #Electrical-industry, #Deal-structuring, #Europe, #Wendel, #KKR, #Mergers-and-acquisitions-(M&A), #debt-capacity, #private-equity, #antitrust, #Schneider-Electric, #club-deals, #capital-structure, #leveraged-loans, #Finance