Equity firm to invest $500M in French consumer giant

Silver Lake Partners, a Silicon Valley private equity and investment firm, is set to inject half a billion dollars into consumer electronics giant Thomson SA and take 7.5 percent control, the French company revealed Thursday (July 22, 2004).

The $500 million strategic investment is part of a proposed development plan that Thomson said it would consider during an extraordinary general meeting on Sept. 15 to obtain shareholders' approval. Through its Thomson, RCA, Technicolor, Grass Valley, brands, Thomson is a world leader in TV equipment on both the receiver and broadcaster ends of transmission.

The Silver Lake investment would take the form of privately-held bonds that would not be transferable and which could not be hedged, Thomson said. As a result Silver Lake would control approximately 7.5 percent of Thomson's share capital, the company added.

"We chose to work with Silver Lake because we believe they will serve as a strategic partner for Thomson as the Company enters its next stage of growth and development. I look forward to working with the Silver Lake team as we accelerate the implementation of the company's strategy, and I welcome Dave Roux to the board," Frank Dangeard, chairman of Thomson, said in a statement issued by Silver Lake. Roux is a co-founder and managing director of Silver Lake.

Silver Lake invests large stakes - typically in the range of $50 million to $400 million - in only a few companies and the proposed investment would be Silver Lake's largest to date.

Ed Zander, who joined Silver Lake after 15 years as a top executive with Sun Microsystems Inc., was a general partner before leaving to become the chairman and CEO of Motorola Inc.

In November 2003 individual investors in Silver Lake, known as limited partners, were said to include more than 150 leading technology executives from the top technology firms, including such names as Michael Dell of Dell Computer, Larry Ellison of Oracle and Bill Gates of Microsoft.

- Peter Clarke

Silicon Strategies