Buyout Investments

Vulcanic

Activity

Vulcanic is an industrial group specialising in the design, manufacture and marketing of electrothermal components (transforming electricity into heat and cold) and items for measuring, checking and regulating temperature in an industrial context. The Vulcanic brand was created in 1973, and is now an undeniable industrial benchmark synonymous with product reliability and durability. Starting in 1972, Vulcanic perfected a new way to distribute its standard products, namely through mail order catalogues. Today, it is now the only player on the market with such a tool. Vulcanic makes around 40% of its sales from its catalogue, which is published in French, English, German and Dutch in all types of existing media, i.e. paper (60,000 copies), CD-Rom and an interactive website.

Context

The Vulcanic group used to be controlled by Dynaction and was listed on the Second Market of the Paris Bourse beginning in 1991. 9.54% of the share capital is publicly traded. As part of its refocusing strategy, Dynaction sold off a part of its capital equipment division in 2000, including Vulcanic. Since AXA Private Equity knew the company and its management well, it was among the potential buyers who were contacted when this activity was sold.

Strategy

Vulcanic’s strategy is three-pronged:

• to consolidate its position on French and European markets through its catalogue and quality of service,
• to continue developing products intended for new market niches,
• to acquire and integrate new businesses.

AXA Private Equity helped to create value by assisting the company with its acquisition programme, which consists of identifying and approaching target companies, negotiating their buyout and setting up the necessary financing.

Since 2000, a certain number of opportunities were reviewed in France and abroad. In July 2001, the RS Isolsec group, which specialises in low voltage transformers, was thus acquired. The acquisition target posted 2003 revenue of €6.5m and served to strengthen Vulcanic’s position abroad in Germany and Spain.

Divestment

In June 2006, AXA Private Equity sold Vulcanic to 21 Centrale Partners and to its management for €82.5 million. This secondary LBO deal was done by 21 Central Partners in partnership with the management team.