In 1999, we backed the secondary management buyout of MC International (MCI), a leading supplier of refrigeration and air-conditioning services (design, installation, remodelling and maintenance) to retail and industrial clients.
The strategy was to fund an aggressive growth plan designed to expand MCI's business through a combination of organic and acquisitive growth. MCI was an attractive company, with a strong brand and market position. Led by a highly capable management team, experienced in acquisitions, the business operated from a total of 69 branches in France, Spain and Poland. Thirty-nine branches in France made them the only national network in the market. Retail refrigeration (particularly strong in the hypermarket sub-sector), with 40% market share, was the largest part of the business.
The company had also recently moved into industrial refrigeration - a natural extension of its core-business -- and air-conditioning via the acquisition of a national chain of air conditioning companies servicing the retail market. The growth prospects for the business were good: the fragmented French refrigeration and air conditioning markets offered excellent consolidation opportunities and the under-developed French air conditioning market forecasted for sharp growth.
The strategy was to focus on these two new market areas, while at the same time driving international expansion by shadowing the expansion of French hypermarket chains - MCI's core client base - into new geographies. Within its industrial refrigeration business, the plan was to focus on building revenues through the growth of its higher-margin maintenance activities. An enhanced sales and marketing focus, including the adoption of cross-selling, and the development of innovative products through strategic partnering in key markets were also key elements of the plan.
Post investment, the business made several acquisitions, completed a successful joint venture in the Hungarian market and successfully diversified into industrial refrigeration, meeting its global targets. In 2001, the business was acquired by Johnson Controls Inc, the global market leader in building control systems, energy and facility management. The strategy is to use the business as a consolidation platform for Johnson's European operations.