An affiliate of Acon Investments, a Washington, D.C.-based private equity firm, has signed a definitive agreement to sell 100 per cent of SAE Towers to KEC International of India for USD95m (excluding working capital adjustments) on a debt-free, cash free basis.
Headquartered in Houston, Texas, with production facilities in Monterrey, Mexico and Belo Horizonte, Brazil, SAE Towers is the largest manufacturer of transmission towers in the Americas, with an annual production capacity of 100,000 metric tons.
SAE Towers’ management team and employees will continue with the company. Under the leadership of Luigi Ruggieri, SAE Towers’ chief executive, the company will continue to provide its clients throughout the Americas with structures critical for the construction of high-voltage transmission lines.
SAE Towers was purchased by Acon in 2007 from the power lines components division of ABB Group, the international engineering firm. During the subsequent three years, Acon and the SAE Towers management team grew SAE Towers, developed new and existing customer relationships, expanded margins and increased backlog almost threefold.
SAE Towers’ Ebitda under Acon’s ownership increased from USD3.5m in 2007 to a budget of approximately USD19.1m in 2010.
The sale will yield proceeds representing over 3.6x Acon’s investment in the company.
The transaction is expected to close in September 2010, subject to regulatory approvals and customary closing conditions.
SAE Towers was advised by Harris Williams on the transaction while KEC was advised by Sagent Advisors and Daiwa Capital Markets India Private.
Ramesh Chandak, managing director and chief executive, KEC International, says: "This acquisition will strengthen KEC’s global leadership position in the large and growing markets of North America and Latin America. SAE Towers has a significant presence in geographic areas which are of substantial interest to KEC. The transmission and distribution spend in these regions are currently rapidly increasing. SAE Towers is well positioned to capitalise on these long term growth opportunities."
Jose Knoell, partner of Acon, adds: "We are very pleased that KEC and SAE Towers’ management team will be working together to further develop SAE Towers’ business throughout the Americas. Given its experience and resources in power transmission globally, KEC will be an excellent home for SAE Towers. We are also extremely proud of the significant shareholder value that SAE Towers’ management team generated within a short amount of time and amidst one of the most challenging macroeconomic environments in recent history."
KEC, a RPG Group company, is one of the largest power transmission engineering, procurement and construction companies in the world.
