International development as one of the main pillars of LEADERSHIP2025 strategic plan

The acquisition of a majority stake in the American company Firstronic is the first step in the L2025 strategic plan. The plan provides for a stronger presence in the strategic markets of the United States and Germany, notably through acquisitions.

In this context, LACROIX announces today that it has signed an exclusive agreement to acquire a majority stake in the American company FIRSTRONIC from its main shareholders. The Group held a stake, initiated in 2017, in the company which has since been completed to 12.5%. Subject to the usual conditions precedent, this transaction will be carried out in co-investment with Bpifrance, which will take a minority stake in Firstronic via its international build-up fund.

FIRSTRONIC, a leading EMS in North America

Founded in 1980, FIRSTRONIC is an EMS (Electronics Manufacturing Services) serving very large customers, mainly in the automotive, industrial and health sectors in North America. With nearly 1,300 collaborators, the company has 2 production sites in Michigan (US) and Mexico.

This operation clearly strengthens LACROIX’s global position in fields that are increasingly demanding electronic solutions. It is extremely relevant from both an operational and financial point of view. 

Solid foundations for the Group’s development in North America 

The acquisition of FIRSTRONIC is perfectly in line with the Group’s strategic ambition to consolidate its positions on the American market. It will first of all enable the Group to establish a strong industrial base on the North American continent and to complete its industrial network on a multi-continental scale. It also creates a solid foundation to accelerate the development of LACROIX’s various activities in the USMCA region. 

Operational benefits combined with a highly attractive financial profile

The operational relevance of this combination is complemented by a particularly attractive financial profile. Indeed, under the leadership of John Sammut, the last few years have seen FIRSTRONIC post double-digit growth in revenue, together with greatly increased margins.

For 2020, FIRSTRONIC posted revenue of $87 million (about €76 million), almost 20% of LACROIX’s revenue, for an EBITDA margin of over 8%. Strong growth is expected across both indicators for the 2021 financial year with a trajectory of $140M in revenues and EBITDA above 9%. 

In addition to the commercial and industrial synergies and economies of scale identified, which were behind the initial acquisition of a stake in 2017, incorporating FIRSTRONIC should  prove immediately accretive withinh the upcoming financial year, particularly in terms of EBITDA margin. Finally, establishing a base in the dollar region should also provide the Group with a natural hedge against exchange rate variations.

Terms of transaction 

As mentioned above, the current management team will remain fully committed in the new organization: John Sammut, present since 2011, will remain CEO of FIRSTRONIC and will retain a 4% of share capital in it, while Jochen Lipp, Chief Operating Officer since 2013, will take an equity stake of 3%.

LACROIX, which already has a 12.5% shareholding, will increase its equity stake in FIRSTRONIC to 62% at the end of the operation.

Lastly, as part of the agreement, co-investing alongside LACROIX, Bpifrance will take a 26% stake in FIRSTRONIC through its International Build-Up Fund (IBF). The IBF aims to accelerate the transformation of French SMEs and family-owned companies. The IBF is the first fund to invest directly abroad alongside family businesses in their external growth projects or to strengthen their subsidiaries.

Bpifrance has already been supporting the growth of LACROIX since 2020 through its Société de Projets Industriels (SPI) fund in the construction of a factory of the future (Symbiose Project).

At the end of thoperation, which is expected to occur very soon, LACROIX intends to continue with its roadmap, including new international acquisitions to strengthen each of its activities.