ZIV – ZIV is one of the leading manufacturers, distributors and installers of protection, control, metering and telecommunications products for power utilities

type Case Study; Former Investment

Date 2007 - 2012

Company at a Glance:

ZIV is a leading global provider of digital equipment and systems for automating the transmission and distribution grid. The Company’s products provide the information and network infrastructure for real-time T&D visibility and control across the entire high voltage to low voltage grid, delivering the core foundation for next generation Smart Grid applications.

Origination and Investment Rationale:

The transaction was envisaged as a proprietary deal since Alantra PE had access to the management team through the CEO of a former investee. Alantra PE’s experience in structuring complex transactions allowed the alignment of interests of numerous minority shareholders and their involvement in a large-scale project. Eleven out of the fifteen shareholders reinvested in the Company, retaining a minority but relevant stake.

The acquisition rationale was based on the following criteria:

    • Good market visibility with attractive growth in the different segments
    • Excellent positioning as a top company in the overall market of protection and control, telecoms and metering of electric assets in Spain and one of the only local players that guarantees flexibility to client needs
    • Ability to implement a good cost cutting policy
    • Product quality, client service and streamlined operations
    • Room for improvement and great upsides in most businesses
    • Clear exit route with sizeable multinationals

Alantra Contribution and Value Creation:

a) Management Build-up and Upgrade

Unwavering and decisive commitment by the management team and the company’s shareholders to the development of cutting-edge products and proprietary technology.

b) Internationalization and Exports

    • International expansion as a key priority of Alantra PE’s project
    • The company penetrated new markets by accompanying its Spanish multinational clients, such as Iberdrola and Gas Natural Fenosa, abroad
    • Wide international expansion with product references in 90 countries, 14 sales offices in 8 countries and local partners in 32 countries
    • International sales accounted for 32% of total revenue in 2011 vs. 17% in 2007

c) Operational Improvements and Organic Growth

    • Restructuring of the company’s original five divisions into three: smart grids, smart meters and grid communications
    • Investment in R&D was a priority, which enabled the company to defend its premium market positioning
    • Business expansion through the development of distribution automation products for Smart Grids and its adaptable technology PRIME

d) Capital Strengthening

    • Bank refinancing to support growth and improve margins
    • Equity injection by all shareholders to support growth and complete refinancing

e) Strategic Add-ons and Expansion

    • Joint Venture in India with Crompton Greaves (final buyer of ZIV)
    • Opening of an office in Mexico and approval of products in several countries

About the Exit:

The Company was sold to strategic buyer Crompton Greaves (Avantha Group), the Indian worldwide leading electrical equipment maker and service provider with whom ZIV was under a joint venture agreement in India prior to the sale, in a competitive auction process where 20+ potential trade buyers were contacted.

The case studies herein are not necessarily representative of the investments made by Alantra Private Equity as a whole and have been included merely for purposes of illustrating the operational and value adding capabilities of Alantra Private Equity. The case studies have not been included to exemplify the quality or performance of any particular investment or for any other purpose.