Legrand Acquires US company Milestone AV Technologies LLC

June 28 2017, 11:00
French company Legrand, a world leader in electrical and digital building infrastructure solutions, announced the acquisition of US group Milestone AV Technologies for $950m. Milestone is the group that owns well-established Audio Video (AV) infrastructure brands, including Chief mounts and racks, Da-Lite screens, Projecta screens, Sanus AV mounts and furniture, and Vaddio conference and PTZ cameras.

Legrand is a global specialist in electrical and digital building infrastructures with a worldwide presence. Recently, the French company has been pursuing an aggressive expansion strategy, including key acquisitions in the North American region, with a portfolio of well-known product lines that include C2G, Cablofil, Electrorack, Luxul, Middle Atlantic, Nuvo, On-Q, Ortronics, Pass & Seymour, Pinnacle, QMotion, Quiktron, Raritan, Solarfective, Vantage, Wattstopper, and Wiremold.

The acquisition1 of Milestone AV Technologies represents a strategic move for Legrand based on the two companies’ strong business complementarities. Driven by sustained social and technological megatrends, both Legrand and Milestone have built strong leading positions in their respective markets. 

The global AV infrastructure and power market accounts for more than $5bn of Legrand’s total digital infrastructure market of over $15bn. Milestone, which is a frontrunner in the US AV infrastructure and power business, has built its success through acquisitions of leading well-known brands: Chief, #1 in commercial AV mounts; Sanus #1 in residential AV mounts; and Da-Lite, #1 in projector screens. Over 75% of Milestone sales are generated by products that rank #1 or #2 on their markets. 

Combined with Legrand’s #1 positions in AV enclosures in the US under the Middle Atlantic Products brand, Milestone will enable the Group to provide the US market with end-to-end offerings for communication, security, distance and collaborative working applications, following important technological trends.

According to Gilles Schnepp, Chairman and CEO of Legrand, “The acquisition of Milestone allows Legrand to pursue its ongoing reinforcement in digital infrastructure, more specifically in the high-value AV infrastructure and power segment in the United States where Legrand is already #1 in AV enclosures with its Middle Atlantic Products brand. Milestone will bring Legrand leading positions in commercial and residential AV mounts, as well as in projector screens enabling the Group to provide AV customers with scalable, end- to-end offerings.

"Milestone’s robust leading positions, well-known brands, businesses supported by strong social and technological megatrends, customer-centric approach, ongoing innovation, and active CSR9 policy are key assets which make this acquisition a highly valuable move that ‘ticks all the boxes’ of Legrand fundamentals.”

Based in Eden Prairie, Minnesota, Milestone recorded 2016 revenues of $464m, 90% in North America. Over the same period, adjusted operating profit and free cash flow stood at respectively 21% and 12.5% of sales. Milestone has about 1,000 employees and has locations in the United States, Canada, China, Hong-Kong, Australia and the Netherlands. Milestone has also built strong distribution channels offering wide geographical coverage and access to a variety of end markets (corporate, hospitality, houses of worship, education, government and retail stores/restaurants). These have helped distribute Milestone products both efficiently and widely.

"Ongoing R&D efforts (more than 100 professionals in engineering and product development, over 360 patents and more than 5,000 SKUs) focusing on AV integrators' needs – safety, ease of installation, reliability – and a customer-centric approach (100 direct sales & technical support and 90 dedicated customer care personnel, digital best customer training, excellent delivery service) have helped develop strong customer loyalty and made Milestone’s brands the “preferred partner” for about 80% of the SCN2 top 50 AV integrators," Legrand states in the announcement. 

A synergetic move with Legrand
Legrand’s acquisition6 of Milestone should generate mid-term sales synergies. Milestone’s strong relationship with 6,000 professional AV dealers should build up Legrand’s existing basis of about 3,500 dealer relationships tied to its Middle Atlantic Products brand. Likewise, Legrand’s strong relationship with electrical, IT and data communication distributors could allow Milestone to move in these distribution channels. With locations in North America, Europe and Asia, Milestone could offer Legrand opportunities to expand its AV infrastructure and power business into new geographical areas.

Resulting operations should also benefit from short to mid-term cost synergies stemming from direct and indirect sourcing with scope for combining purchasing platforms, streamlining of production facilities particularly in Asia, and opportunities to optimize administrative areas.

Legrand’s accessible market is now estimated at more than $115bn, split between electrical infrastructure for less than $100bn and digital infrastructures for more than $15bn.
www.milestone.com | www.legrand.com
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