Dirickx secures Slovakian deal with 3i support.
Founded in 1921 by the grandfather of the current CEO, Jacques Dirickx, Dirickx is a specialist provider of perimeter security. The company, which has manufacturing facilities in France, Slovakia, and China, provides complete fencing including furnishings (rolls or panel structures) and fixation accessories and catches (gates, automation and gate systems).
3i was invited in August 2004 by Crédit Lyonnaise Private Equity (CLPE) to take a minority stake in the business. Some members of the Dirickx family wanted to exit the business so two thirds of the investment was used to buy out their stake. The remainder was used to fund its acquisition programme. The company was in negotiations with 3i for two months and the whole deal took six months to complete.
A long standing relationship
3i was selected because it had been watching Dirickx for many years and had built up a long standing relationship with the company's CEO and Finance Director. It also has an extensive network in Eastern Europe, Germany and the Far East. Olivier Le Gall, Director, 3i, explains: "The group is particularly focused on growing in Eastern Europe and China and our presence in those areas was a key differentiator. Dirickx had an office in Beijing for 10 years and was about to open a factory near Beijing at the time we invested. The company has a clear strategy for China but liked the fact that they could use our office and network in North East Asia if necessary. It was important to them to work with a partner that understood the pitfalls of doing business in China."
A top quality business
In turn, 3i was attracted to Dirickx because it was a respected leader in its home market with a reputation for innovation and quality. It is also the only player in the industry that can provide organisations with a 'one stop shop' solution in the area of perimeter security.
Dirickx's management team is also of high quality. The current CEO, Jacques Dirickx, turned the company around in 1984 and as consistently increased its profits in the years that have followed. He was responsible for moving the business into the service space and has spearheaded Dirickx's drive into the Chinese market. Dirickx is supported by a highly experienced team that works well together and has a clear strategy for the company.
Since investing, 3i has helped the company purchase a rival in Slovakia that specialises in Active Security Systems. It was involved in the bid process, in the due diligence on the deal, examined Dirickx's plans for the business and provided constructive feedback, especially on the post-acquisition integration plan. The deal will reinforce Dirickx's presence not just in Slovakia but throughout Eastern Europe, an important market for the business.
Stanislas Cuny, Investment Director, 3i joined the board of Dirickx. He quickly realised that the company needed to improve its financial reporting. Cuny explains: "Dirickx has operations around the world and we needed to get timely financial information on each subsidiary. We took the decision to appoint an IT consultancy to take on the challenge."
Dirickx now has an Enterprise Resource Planning solution that provides the board with profit and loss figures and a consolidated balance sheet on a quarterly basis. This is a significant achievement for a company with divisions in the Far East and Europe.
As a result of these initiatives, Dirickx is now ahead of its business plan. Its profits are up by 50% and sales are projected to rise by 25% this year. The company's performance has also been acknowledged by the industry - Dirickx was recently nominated for Ernst & Young's 'French Entrepreneur of the Year, 2005' award.
Jacques Dirickx, CEO, Dirickx says: "The deal has enabled my family to successfully secure a portion of its assets while allowing Dirickx to remain independent and accelerate its international development. 3i brings a global network of contacts and its strategic vision to our company."