Gores to buy into Siemens empire
Gores Group, a private equity firm headed by Los Angeles billionaire Alec Gores, will acquire a 51% stake in Siemens Enterprise Communications, a division of Germany’s electronics giant Siemens with annual revenue of $5.5 billion, the companies said Tuesday. Terms were undisclosed.
Siemens would keep 49% of the networking and communications company, which would be a joint venture operated by Gores Group. The two partners pledged to invest at least $275 million each to fund growth through acquisitions or new initiatives, and Gores would roll two of its portfolio companies, Enterasys and SER Solutions, into the business.
“We have been looking for an opportunity to expand our presence in the enterprise networking and communications space, and this partnership with Siemens provides the perfect fit,” said Alec Gores, Gores Group’s founder and chairman.
Gores, whose investment firm has $1.75 billion in assets under management and 15 companies in its portfolio, said his team approached Siemens about the venture two years ago after acquiring Enterasys. The deal is expected to close by Sept. 30, pending approval by German and U.S. regulators.
Mark Stone, senior managing director at Gores, would be chairman and interim chief executive of Siemens Enterprise Communications, which has 16,000 employees and production facilities in Germany, Brazil and Greece, with customers in 90 countries for its equipment and software.
Stone said he expected to be a buyer amid ongoing consolidation in a market that is dominated by Cisco Systems Inc. but also includes 20 to 30 other competitors.
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