The Gores Group to Acquire Majority Stake in Sagem Communications
October 28, 2007
Paris, October 28, 2007--SAFRAN has received an irrevocable offer from The Gores Group concerning the acquisition of Sagem Communications for an enterprise value of 383 million euros.
On that basis, SAFRAN has granted to The Gores Group an exclusivity of negotiation for the sale of its subsidiary Sagem Communications.
This transaction should be finalized in the coming months following consultation with corporate and employee entities and receipt of the required administrative authorizations.
The Gores Group will be majority shareholder and will be joined by minority shareholders including SAFRAN and a large group of employees (management, employee mutual fund, etc.).
The company Sagem Communications, part of SAFRAN's Communications branch, offers broadband and convergence solutions, including printing terminals, digital TV set-top boxes, broadband and residential terminals, and telecom systems and partnerships. The company has 6,500 employees and posted revenues of 1.3 billion euros in 2006 (proforma).
"We sought a solution that would ensure the best possible future for Sagem Communications and its employees, and would also protect the interests of its customers and of SAFRAN shareholders," said SAFRAN Chief Executive Officer Jean-Paul Herteman. "The Gores Group provided the best guarantees from this point of view. And with this new shareholding structure, Sagem Communications will enjoy the conditions for further growth that it deserves."
"Sagem Communications will become the world leader in broadband terminals and convergence solutions through both organic and external growth, during a period characterized by consolidation of the market," said Patrick Sevian, Chairman and CEO of Sagem Communications. "This business objective is within our reach, thanks to the commitments made by our new majority shareholder and the traditionally strong motivation and commitment of our employees."
"We have met a formidable group of people in Sagem Communications, a sound, profitable company that offers excellent foundations for growth," commented Steve Yager, Senior Managing Director of Gores. "Sagem Communications already holds strong positions in promising high-tech markets, a specialty of our investment group. We are convinced that Sagem Communications harbors excellent growth potential, and we intend to provide the resources needed to support this development."
SAFRAN is an international high-technology group with four core businesses: Aerospace Propulsion, Aircraft Equipment, Defense Security, and Communications. It has 62,000 employees in over 30 countries, and annual revenues exceeding 11 billion euros. The SAFRAN Group comprises a number of companies with prestigious brand names, and holds, alone or in partnership, global or European leadership positions in all of its markets.
About Sagem Communications
Sagem Communications (SAFRAN Group) is a major player in the field of communications, having acquired international positions thanks to a high innovative potential. The SAGEM products benefit from a particular awareness in the following activities: printing terminals, residential terminals, digital TV set-top boxes, systems, electronic metering.
About The Gores Group, LLC
Founded in 1987, The Gores Group is a private equity firm focused on acquiring controlling interests in mature and growing businesses which can benefit from the firm's operating experience and flexible capital base. The firm combines the operational expertise and detailed due diligence capabilities of a strategic buyer with the seasoned M&A team of a traditional financial buyer. The Gores Group has become a leading investor having demonstrated over time a reliable track record of creating substantial value in its portfolio companies alongside management. The firm?s current private equity fund has committed equity capital of $1.3 billion. Headquartered in Los Angeles, California, The Gores Group maintains offices in Boulder, Colorado and London.