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Schnepp says Legrand quickly put in place a reorganization program, even before the private investors bought into the company. Still, once the new owners arrived, "they stimulated our performance," Schnepp says. Overall, "the Legrand model is turning more quickly and more efficiently." KKR and Wendel helped the firm bring in consultants, who recommended sweeping changes to more than 3,000 processes. Result: Legrand has reduced its purchasing costs by about $95 million. "They helped us formulate our needs," Schnepp says. "They gave us confidence to go further" than the firm might otherwise have done. KKR has also encouraged Legrand to acquire three firms in the past six months alone.
Yet as the American moneymen continue their advance through Europe, the grumbling seems sure to continue. Jürgen Peters, head of Germany's metalworkers' union, for one, says his union, with its criticism of the big U.S. groups, simply "brought to light what others obviously wanted to leave in the dark"--and has every intention of shining more lights on the phenomenon. It's not just labor that is complaining. Blackstone made such a big return--more than $3 billion--from its investment in German chemical fiber company Celanese, which it acquired and quickly took public again in the U.S., that it has drawn the ire of a New York City--based hedge fund, Paulson & Co., which alleges that the initial deal wasn't fairly valued. And some private-equity firms are starting to fret that the European buyout scene has grown so fast that it's in danger of overheating. "It's like a perfect storm," says Carlyle's Millet, who is worried about the increased amounts of debt and dwindling returns. "All the ingredients are there for a big blowup."
Millet is well aware that many Europeans still view U.S. private-equity groups as unscrupulous financiers "who will debone a company and chop it up into slices like a sausage." But with time, as more and more companies on the Continent get bought and resold, he believes people will understand that private equity is a positive force. "We are important actors, and we are creating value, we are creating jobs, and we are developing firms. Little by little, that message is getting through," he says. Perhaps, but the Europeans are still on the lookout for locusts. --Reported by Daren Fonda and Barbara Kiviat/New York