3S Photonics Group of Nozay, France, which makes chips, optical discrete modules and passive components for the laser, sensing and telecom markets, has been acquired by Paris-based private equity firm Eurazeo.
With a diversified portfolio of €4bn in assets, Eurazeo launched Eurazeo Croissance last year as part of its policy to support the development of French SMEs (small and medium enterprises). After its first investment in renewable energy firm Fonroche, 3S Photonics represents Eurazeo Croissance’s second investment.
Eurazeo is purchasing the holdings of several 3S investors, including Fonds Stratégique d’Investissement (FSI) for which 3S was one of its first investments. Eurazeo will also invest in a capital increase of €10m to finance 3S’ growth, making a total equity investment of €37m by Eurazeo. Following the equity increase, Eurazeo will hold close to 83% of 3S Photonics’ capital.
3S was founded in 1994 as Alcatel Optronics S.A. (a subsidiary of the Alcatel group) and acquired in 2003 by Avanex Corp of Fremont, CA, USA, becoming Avanex France S.A. In April 2007, it was bought by entrepreneur Alexandre Krivine (becoming president & CEO) and chief technology officer Didier Sauvage (former director of Avanex France) and renamed 3S Photonics. The firm designs and manufactures both active optoelectronic components (incorporating gallium arsenide and indium phosphide laser chips fabricated in-house at Nozay, France) and passive fiber-based optical components (made at what was formerly Avensys Inc of Montreal, Quebec, Canada, acquired in early 2010). 3S is active in two global markets: high-speed telecom networks (both the historical core business of submarine telecoms as well as, more recently, terrestrial telecoms) and fiber lasers (supplying products for industrial, medical and defense applications). With about 400 staff, 3S generated revenue of €51m in fiscal 2011 (to end June).
Eurazeo aims to help 3S consolidate its position in its traditional telecoms markets and broaden its presence in the industrial laser market by supporting its external growth policy, including through future reinvestment.
“We will be supporting Alexandre Krivine and his team, continuing the work begun with the help of FSI to make 3S Photonics a true global leader in the optoelectronic components market,” says Fabrice de Gaudemar, Eurazeo’s executive board member responsible for Eurazeo Croissance.
“FSI’s intervention in 2009 facilitated a first round of financing, helping to enable 3S Photonics’ acquisition of Avensys,” notes FSI’s director of investment Thierry Sommelet. “We are pleased that 3S Photonics will be able to continue its development with the support of a recognized leader in France’s private equity industry,” he adds.
“We are gratified by Eurazeo’s entry into our capital structure,” says Krivine. “With their support, we look forward to accelerating our organic and external growth and seizing opportunities offered by the international consolidation of our industry.”