Moeller Group: Back to core business
The Moeller group of companies has its headquarters in Bonn and is one of Germany’s largest privately run industrial enterprises. Moeller operates globally and is a supplier of electrotechnical components required for energy distribution and automation, intended either for industrial use, or for use in infrastructure-related or residential buildings.
Investment funds advised by Advent International acquire Moeller in 2003, at a time when the company is in great operational and financial difficulties. These difficulties are the result of several changes in strategy, a high degree of management fluctuation, insufficient transparency of corporate structures and the effects of an economic slump, back in 2001. The company is loosing sales and suffering losses, it is unable to honour its liabilities and it is controlled by a syndicate of 19 banks, who have also installed a new management team.In the course of a rigorous process, management and Advent jointly develop a new business strategy, including a detailed plan on how to focus the company on promising market segments with a potential for growth, aimed at bringing Moeller back into the black.
A significant role in this process is played by two "operating partners”, brought in by Advent. These are professionals with many years of management experience in the field of electrical engineering, who support Advent exclusively. Advent’s entire pool of operating partners consists of 25 experts with varying industrial backgrounds.
In parallel to the acquisition of Moeller, the funds advised by Advent also perform an increase in capital, designed to strengthen the company’s equity base and to provide funding for the business plan. The management team is reinforced by an executive from the company and is complemented by the two operating partners, who – on other occasions - would typically have restricted themselves to positions in the advisory council or the supervisory board.
Implementing the new business strategy is started immediately, by spawning a multitude of individual activities covering the following areas:
Focussing on Moeller’s strengths, which are the manufacture and distribution of electrotechnical components required for industrial and building automation (the core business), but forcefully withdrawing from its loss-making business division "Systems", whose various areas of operation are to be sold off to suitable corporate clients, in a series of separate business transactions.
Systematically developing the company’s market position with respect to the core business, e.g. by reorganising the sales division, by adopting key-account-management, by investing into novel products and their introduction on the market, and by driving international expansion.
Optimising corporate structures and internal procedures with respect to transparency and efficiency, in departments such as procurement, adminstration and production. Making investments in order to raise new factories and to merge, partially restructure or optimise existing production sites.
In the period following the takeover by the Advent-funds, Moeller performs a remarkable turnaround: As early as 2004/2005, Moeller returns to profitability and shows a strong growth in sales. The growth rate is in excess of 10 percent, which is well beyond the industry average and which is sustained in the following years.
The successful implementation of its business strategy has restored Moeller as a technical market leader and an internationally well-positioned company, with a highly respected brand image. Based on these achievements and with good prospects for the future, the Advent-funds sell Moeller to Doughty Hanson in 2005.