Littlejohn & Co. Lets Go of Fund I InvestmentLeslie Green/Buyouts/Sep 25, 2000 -- After two-and-one-half years of ownership, Littlejohn & Co. this month sold General Trailers, a French truck trailer manufacturer, to Apax Partners & CIE, a French private equity firm. Angus Littlejohn, chairman of Littlejohn & Co., declined to provide a transaction price, but said the sale generated an internal rate of return for his firm north of 50%. General Trailers has a line of truck trailers and trailer parts that operates under brand names including GT Fruehauf Trailer and GT Benalu. In 1999, the company produced 600 million euro ($511.7 million) in revenue. Littlejohn described the investment in General Trailers as "very much pursuant to Littlejohn & Co.'s mandate." The firm considers itself a restructuring investor, Littlejohn said. It buys companies that are in trouble, under-performing or suffering in some way - just as General Trailer was in 1998 - stabilizes them, builds them to a targeted profitability level and considers their job done. When Littlejohn & Co. acquired General Trailer, it was comprised of six companies in three countries. The six companies all manufactured similar products, many of which competed against each other, Littlejohn said. "So the problems were obvious," he said. "There was proliferation of product, very inefficient purchasing because they weren't taking advantage of economies of scale, no standardization of products, inefficient use of plant capacity and competition of pricing." Littlejohn & Co. merged the companies together and restructured them on a "strategic business unit basis." For example, one business unit was responsible for dry freight while another had tankers, and each business unit oversaw business on a pan-European basis. Additionally, Littlejohn & Co. redesigned the product line, consolidated purchasing and streamlined factory operations, Littlejohn said. At the time of the sale to Apax, General Trailers' earnings before interest, taxes, depreciation and amortization had more than doubled, and Littlejohn & Co. had assisted in paying down much of the company's debt. Although the firm had completed European add-on acquisitions to U.S.-based portfolio companies, General Trailers was Littlejohn & Co.'s first stand-alone European investment. "We did what we said we were going to do and it's been a good investment for our LPs," Littlejohn said.