* Eyes LBO, IPO or sale to industrial player in 5 years
* Sees life in offshore oil, no rebound in marine and steel
* Enterprise value multiplied by 15 between 2005 and 2008
By Marie Maitre
PARIS, June 12 (Reuters) - When Pierre Bastid took the helm
at the power conversion unit of France's TGV maker Alstom
Bastid has since engineered two leveraged buyouts (LBO) -- in 2005 and 2008 -- while restructuring the business named Converteam, and increased its enterprise value from 130 million euros ($182.4 million) to 2 billion euros in under 4 years.
Converteam, a provider of electrical motors and engineering solutions, has now started a new chapter of its life that will eventually lead to a stock market listing, a sale to an industrial player or a third LBO, Bastid told Reuters.
"These are the three options for our company in the next four to five years," he said in an interview, ruling out any decisive move before then.
However, a third LBO to buy out the 33 percent that he and about 40 of his employees hold in Converteam is "the most attractive option," said Bastid, ranked as one of France's 500 wealthiest businessmen by French magazine Challenges in 2008.
In 2005, Bastid convinced Barclays Private Equity to team up with management to buy Converteam. Last year, he closed a second deal with LBO France, days before the failure of U.S. bank Lehman Brothers triggered a global financial market rout.
Each partner now holds a third of the company's capital.
NO WORKING CAPITAL NEEDS
"We have quite a pleasant model for financiers," he said, citing low capital expenditure -- less than 30 million euros for sales of 1.1 billion euros in 2008 -- and no working capital needs as clients pay before Converteam pays its suppliers.
"So we don't really need shareholders," said Bastid, who
estimates Converteam has a 15 percent stake in a global market
worth 10 billion euros annually. It competes with ABB
Converteam, whose history stretches back to the end of the 19th century, supplies propulsion systems to naval combat vessels, cruise ships and tankers, direct drive generators to wind farms and automation solutions for steelmakers.
This broad and disparate portfolio of clients -- which also includes the offshore oil and gas industry where Converteam provides motors for pumps and drilling systems -- helps the company weather economic downturns, said Bastid.
"This is key in the current crisis," he said, adding he was seeing signs of recovery in the offshore oil and gas industry, and also predicted a rebound in activity in the renewable energy sector thanks to national stimulus plans.
Bastid targets a double-digit sales rise in 2009, based on the strength of a 1.4 billion euro order book at the end of 2008, but he admits having no visibility beyond this year.
"The first quarter was very quiet, very flat in all our markets," which will impact the company's order book.
"The big issue is to decide how much longer we must hold onto valuable staff without putting the company at risk if the crisis was to last longer," he said.
He ruled out any major acquisition in the near future but Bastid said Converteam may buy small companies with enterprise values of up to 50 million euros to consolidate a very fragmented industry and gain access to new markets.
Converteam eyes new markets such as water treatment or solar power. "These are up-and-coming markets, like wind power turbines were in 2006 when they represented 10 million euros in revenues. They now make up 15 percent of our order book."
To read about the LBO France deal with Converteam, click on [ID:nL4108362]
For Euronext small and mid-cap interviews see [ID:nSMCAPSFR]