MGE UPS SYSTEMS Completes Management Buyout — Employees and Schneider Electric Boost Stake in Power Protection Leader

Business Wire, May 4, 2000

Business Editors/High-Tech Writers

COSTA MESA, Calif.--(BUSINESS WIRE)--May 4, 2000

MGE UPS SYSTEMS' management and employees today announced they have more than doubled their holdings in the company in order to strengthen their participation and build on its current success.

Joining the increase of holdings, Schneider Electric has expanded its interest from 14 percent to one-third. In addition, the management buy-out (MBO) funds of ABN Amro and Legal & General Ventures, now hold one-third of the capital.

Following Europe Capital Partner's (ECP) decision to sell the company in November 1999, MGE UPS SYSTEMS' management organized to maintain the independence of the company by strengthening the shareholder structure with the presence of two major European MBO support companies, Legal & General Ventures and ABN AMRO Capital, and with employees and Schneider Electric each increasing their interests to one-third of the share capital.

MGE UPS SYSTEMS was founded in September 1996, the result of a spin-off of the UPS activities created by Merlin Gerin in 1968 in Europe and EPE Technologies in North America and subsequently developed by Schneider Electric and Square D. Initially, MGE UPS SYSTEMS management and employees held 14 percent of the company's capital together with Schneider Electric (15 percent) and ECP investment capital (71 percent).

Under the new arrangement, MGE UPS SYSTEMS will further expand its development while maintaining a certain amount of independence and involving employees even more closely in the company's growth. With production sites in Costa Mesa, France, and China, MGE UPS SYSTEMS is one of the world leaders in the UPS market. After four years in existence, MGE UPS SYSTEMS now ranks among the world's top three UPS vendors, particularly in the large- and medium-sized equipment markets.

The rapid growth of Internet infrastructure investment has contributed to a very significant upturn in "industrial-strength" UPS activity, one of MGE's major strengths. This represents a tremendous growth opportunity for the company, which has doubled its sales and increased operating income 250 percent.

"Driven by investments in Internet infrastructure, our revenues and profits have increased sharply. Following 18 percent growth in revenues in 1999, we forecast 30 percent growth for the year 2000, with operating profits rising 51 percent from 9.5 to 11 percent of revenues. The market, up 8 percent in 1999, should grow a full 11 percent in 2000. Our results are particularly striking in North America, where our revenues are up 88 percent, and in Europe, up 20 percent," declared Jean-Claude Pucheu, chief executive officer of MGE UPS SYSTEMS.

"We are very pleased to help MGE UPS SYSTEMS management maintain the independence of their company that represents one of the most outstanding growth trends that we have seen," declared Christophe Fercocq of Legal & General Ventures. "We are convinced that the company will continue its development and make an exciting entry on the stock market in four or five years," adds Patrice Verrier of ABN AMRO Capital.

"Management and the entire workforce are highly satisfied with this buy-out transaction that gives the company the means to pursue the strategy that has produced its current success, based on continuous improvement in customer satisfaction, the continued independence of the company and the strong involvement of all employees who are now company shareholders," commented MGE's Americas President Dave Petratis.

About MGE UPS SYSTEMS

MGE UPS SYSTEMS is the world leader in power protection for computer, Internet, telecommunications and industrial installations. It manufactures and sells a number of UPS ranges and active harmonic conditioners and provides all associated services. With over 35 years of experience in the field and active presence in more than 100 countries on every continent, MGE UPS SYSTEMS revenues amounted to USD 500 million in 1999 with 2,765 employees around the world.

It has five industrial sites (one in the USA, two in France, and two in Asia) and two R&D centers (one in the USA and one in Europe). MGE UPS SYSTEMS is the only manufacturer in the world to offer such a wide range of UPSs, from 300 VA to 800 kVA and has achieved worldwide recognition for backing up at least 90 percent of the Fortune 500. To learn more about MGE's innovative power protection solutions, visit MGE's Web site at: www.mgeups.com or call MGE at 800/523-0142.