John Searle tells the Editor that SAFT is doing all the right things— Doughty Hanson won’t change much!
It’s business as usual for John Searle and the rest of the team at SAFT, following the announcement over two months ago that the company had been purchased by Doughty Hanson, one of the largest private equity funds in Europe.
SAFT had been owned by Alcatel for 80 years, so surely there was some trepidation from him and the senior management team? Far from it. “They’ve not only bought the company—they’ve bought our strategy,” says Searle.
And what’s that? Well, you could read the interview with John that I carried out back in Batteries International nearly two years ago.
Then, SAFT was almost undergoing a change of ownership, but it fell through. There had been talk of a management buy out even earlier. But the overall direction was the same—to stay out of mass market consumer batteries in both lithium and NiMH, to stay in advanced lithium, to remain with military batteries and to champion industrial nickel cadmium, despite all the difficulties the European Commission could throw at the company, which as our news section shows, has succeeded
SAFT also had an interest in automotive—developing a NiMH-based technology for the much anticipated 42-volt automotive market. That’s the only part of the business that hasn’t delivered—not through any fault of SAFT—the market need just isn’t there. But everything else is doing very well. The year 2003 will have been an excellent one for primary lithium sales to the US and other armed forces. And even though the aircraft battery market and industrial telecom market has been poor, even before 9/11, they are showing good signs of recovery.
And the highly publicised giant battery in Alaska— is there a future there too? Searle is not over optimistic on that one—the prospect of a US$12m battery order had been on the table for several years and there’s the possibility of another smaller one—but in all honesty he is of the opinion that it was very much a one-off.
SAFT’s new owners have already mentioned growth through acquisition but where will this come from? In the last three years, SAFT has acquired virtually all the smaller lithium battery makers in Europe of any size so are we looking at a switch to other chemistries—like lead? Searle won’t mention any names but ruled out SAFT being given the resources to take on the really big groupings that have now emerged. But he did say that since the press announcement, plenty of businesses have contacted SAFT in the hope that they could be purchased.
So what attracted Doughty Hanson to SAFT? It’s the profile of the business—not the technologies. It’s European headquartered, yet a global player and a global leader, profitable and with a good management team. And how long will they be involved? Most science-based businesses fear this kind of owner—R&D usually gets cut. Searle believes that Doughty Hanson could have an involvement between five and ten years before the company is sold on at a tidy profit.
Growth prospects look very good—probably in excess of five % per annum and maybe more in the next few years within the context of an insecure world. “The military spending will ramp down quickly at some point and we have to be able to handle that well too,” adds Searle.
To compensate, he expects the culture of “security” to feed through into new orders. As they say, it really is an ill wind that blows no good!