Case Study: Sagem Communications

Summary

In January 2008, The Gores Group carved-out Sagem Communications (“Sagemcom”) from Safran SA (“Safran”) to establish one of France’s premier technology companies. Under Gores’ guidance, Sagemcom increased revenues from 2007 to 2010 and expanded market share in both European and global markets.

Business Description

Sagemcom is a Paris-based technology company specializing in broadband communications and convergence activities; products include digital TV set-top boxes, broadband residential terminals, printing terminals and other communications equipment.

Source of Transaction

Gores’ Business Development team sourced the opportunity through its proprietary network and positioned Gores early on as a credible buyer and partner to management. Through the early identification and evaluation of Sagemcom, Gores was able to ultimately partner with management to acquire the company from Safran through a pre-empted auction in January 2008.

Value Creation

Post acquisition, Gores reorganized Sagemcom into three separate legal entities (Broadband, Energy & Telecom, and Documents) and implemented various operating initiatives across each business unit. In Broadband, Sagemcom diversified and expanded its customer base by acquiring key Tier 1 & 2 operators in select countries and focused on being first or early-to-market with high-end products. In Energy & Telecom, Gores refocused the strategy on developing emerging technologies into commercial businesses through organic growth and strategic M&A.; In Documents, Gores restructured the business, enabling profitability through 2010 despite market headwinds in printing. Furthermore, in 2009, Sagemcom acquired the Broadband and Wimax activities of Gigaset, allowing the company to strengthen its U.S. presence and position it to win large, reputable accounts.

Under Gores’ ownership, Sagemcom became one of France’s premier technology companies specializing in broadband communications and convergence activities. In August 2011, Gores successfully sold Sagemcom to The Carlyle Group, marking the largest European exit in Gores’ history.