Schneider Electric, an international electrical equipment holding agreed to acquire Wessen Group, a Russian manufacturer of electrical accessories from the Finish private equity firm Ahlstr?m Capital. With this acquisition, Schneider Electric said it would significantly reinforce its exposure to the low voltage installation market in Russia. The deal is expected to close in the second quarter of 2008.
Wessen Group, which designs, manufactures and markets a comprehensive range of wiring devices, primarily switches and sockets, reported sales of EUR 24 million in 2007, of which 90% were in Russia. The company was founded in 1966, under the name of Potencial and adopted the Wessen brand in 2002. It employs about 1,800 people in its factory in the city of Kozmodemiansk and seven sales agencies across Russia.
Driven by the substantial growth in the Russian construction industry, Wessen’s sales have doubled in the past three years. The company is the leader in Russian residential market for electrical accessories with 30% share. The market is expected to grow annually by 15% in the next five years.
Ahlstrom Capital, which focuses on industrial and real estate private equity investments, including in Russia, acquired a 51% stake in Wessen Group in January 2005 and increased its holding to 70% in May 2007. The other 30% stake is owned by the management of Wessen.
In its previous Russian private equity transaction, Ahlstrom Capital sold 100% stake in the Russian flexible packaging company Akerlund & Rausing Kuban to Teich AG, part of the Austrian packaging group Constantia Packaging AG.
Ahlstrom Capital has also pledged to invest $5 million in Mint Capital II, a Russia-based private equity fund that focuses on the Russian consumer sector.