CP Electronics (2016)

Deal summary

Founded over 40 years ago, CP Electronics (CPE) is the UK’s leading manufacturer of lighting control systems. It assists its blue chip customer base in reducing their operating costs and carbon footprint through an extensive range of energy saving controls.

Inflexion invested in CPE in January 2014 through its investment in Aspen Pumps. Building on the business’s best-in-class product suite and international distribution network, further investment was made in the sales function, new product development and the global infrastructure of the business. The CEO and Chairman of Aspen Pumps took active board roles and Inflexion introduced an experienced international operator to help develop further penetration of the attractive European market. In the last two years, revenue and profitability have grown in excess of 40% whilst staff numbers have increased over 35%.

We had a long-standing relationship with CPE, having advised the company for a number of years ahead of the Inflexion investment. Since then, we have worked alongside the enlarged shareholder base and Board, advising regularly on their strategic options.

The shareholders agreed it was time for an exit and, having demonstrated our deep understanding of the business, sector knowledge and our record of delivering international deals, retained our role advising the company.

What difference did we make?

We undertook a strategic review of the shareholder’s exit options, covering both trade and private equity opportunities. Our detailed knowledge of the space enabled us to short list the most likely trade acquirers and we engaged with them some 12 months ahead of the planned exit to enable us to identify the strongest parties on which to focus. Our engagement was tailored around each buyer so as to focus on the strategic and synergy value of CPE to them. As part of this, we used the threat of a wider trade and private equity process to encourage preemptive interest from strategic acquirers that exhibited the most appetite.

From early in our engagement with Legrand, they behaved like a highly motivated acquirer and we gave them the opportunity to preempt a wider process on the back of relatively limited commercial information. Following a period of negotiation, a deal was reached and concluded with minimal distraction to the business and without disclosing confidential information to a wider population.

The deal was very successful for all involved – the management team have committed to remaining with the business to ensure that the combination of Legrand’s global network and the dynamic flair of CPE sees the company continue to go from strength to strength.

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What our client said
"Catalyst were instrumental in preparing our business for the original investment by Inflexion in 2014. Post this investment, Catalyst have been highly proactive in providing us with ongoing market analysis for investment decisions and strategic options. Legrand were clearly a compelling strategic buyer for CPE and Catalyst’s senior team were front and centre in negotiating the optimum deal for all involved." Marcus Martin
Managing Director, CP Electronics