Phildrew Ventures Looks To Acquire French Co. –

Phildrew Ventures last month announced its intention to acquire Groupe Valfond, a quoted French castings supplier, in a FFr2.5 billion deal ($403.5 million). The transaction, which is subject to EC clearance, ranks as the largest deal led to date by Phildrew and is also the first deal the firm has led in France. The acquisition also is noteworthy as a public-to-private buyout: A fully-quoted company, Groupe Valois, owns 72% of Valfond.

Phildrew, together with UBS Capital, has agreed to acquire the Groupe Valois holding; the investors will purchase shares from minority shareholders that wish to sell via a public offer. The transaction is expected to close next month.

Groupe Valfond specializes in the design, development and manufacture of iron and aluminum foundry components, principally for the automotive industry.

Headquartered in Paris, the company employs more than 10,000 people at 36 sites in France, Germany and Spain. Groupe Valfond last year generated approximately FFr6 billion in revenue.

If the public offer for the minority shares is fully subscribed, Phildrew-managed funds and UBS will invest equity totaling FFr1.1 billion. Ruth Storm of Phildrew said the firm will split its investment in Groupe Valfond between its fourth and fifth funds. The deal will be the second investment made from Fund V, which closed recently on GBP330 million, or 10% more than its original target.

Phildrew and UBS Capital may later syndicate a portion of their investments but will retain a majority stake. Banque Paribas and Warburg Dillon Read are arranging acquisition debt.

Eyeing a Possible Merger

Ms. Storm said Banque Arjiil introduced Phildrew to the deal-partly on the strength of the firm’s earlier investment in Triplex Components, a U.K. castings group. A merger between Triplex and Groupe Valfond is a possibility, although Phildrew has yet to make a decision on the matter. Ms. Storm described the Valfond acquisition as “an exciting deal, offering synergies with our existing portfolio and concentrating expertise to develop a world-class business.”