In December 1995 Cinven was involved in the buyout of Holec Holland NV. This Dutch company belonged to the quoted Begemann Group and was the leading manufacturer of medium and low voltage electrical switchgear in its home market. It had production operations in the Netherlands, Denmark and China together with various sales offices abroad.
Holec had an excellent reputation, market share and cashflows in its home market and was well placed to grow its overseas sales in certain niche markets. However the key strategies behind this investment were to improve earnings and cashflow through restructuring production, to reduce costs and tighten working capital. These would lead to substantially increased returns on investment.
Management, together with the investors, pursued the strategy set out, exceeding operating profit targets. It also reduced its debt levels more quickly than planned. In April 1998, less than 3 years from the time of the investment, the business was sold to Delta, the UK based public company.
Multiple returned on investment: 3.4x