Doughty Hanson, the European private equity firm, has today announced that Doughty Hanson & Co III and Doughty Hanson & Co V have agreed to sell their stakes in LM Wind Power, a leading manufacturer of wind blades, to GE for an enterprise value of €1.5 billion. The acquisition is valued at 8.3 times 2016 forecast EBITDA. The transaction is expected to close in the first half of 2017 subject to regulatory approvals.
Originally founded in 1940 as a furniture manufacturer, LM Wind Power has evolved into one of the leading players in the production of blades for wind turbines. LM Wind Power has a global manufacturing footprint of 13 sites in eight countries across four continents and continues to expand. For the first half of 2016, the Company reported sales of €491 million and EBITDA of €87 million which represented year-on-year growth of 40% and 81% respectively. In June of this year, LM Wind Power unveiled the world’s longest ever blade (88.4 metres long), demonstrating the Company’s continued strength in technology and manufacturing. LM blades worldwide today generate 77GW of clean energy.
Doughty Hanson originally acquired the Company from its founder in May 2001. LM Wind Power represents the final exit from Doughty Hanson & Co III and will give final projected returns of 2.4x cost and a gross IRR of 18% on the Fund. There are two remaining assets in Doughty Hanson & Co V.
Commenting on the transaction, Dick Hanson, Chairman of Doughty Hanson and Chairman of LM Wind Power, said: “This is a significant transaction in the history of Doughty Hanson. We have owned LM Wind Power for 15 years and under our ownership the business has grown from a business with sales of €260 million employing 2,500 people to one with sales approaching €1 billion and over 9,000 employees. I am very proud of the work we have done in transforming the business from what was essentially a cottage industry to become one of the leaders in a growing market. We believe that GE is the ideal owner for the business and will take LM Wind Power to the next level. ”
Doughty Hanson was advised by HSBC.