001-001couverture DEF 29/05/07 17:10 Page 1 Special Issue • ENGLISH EDITION EACH MONTH • LE JOURNAL DES PROFESSIONNELS DU CAPITAL INVESTISSEMENT MAGAZINE Special Issue ■ June 2007

The new president paid a visit during his campain to Moteurs FRENCH PRIVATE EQUITY 2007 Baudoin, under LBO with Axa PE. A good omen for the industry? A year in France PE INDUSTRY VENTURE STORY EXPANSION: HOW TO LIVE IN THE SOCIAL IMAGE… IPOs ARE BACK DIANA INGRÉDIENTS THE SHADOW OF THE LBO? In front of countless The momentum is good. The pet food and culinary Sustaining growth, maintaining control attacks from unions and Buyoant market has ingredients company has over the company, getting used to a politicians, French LBO opened up the found the right recipe world is preparing horizons for with the LBO financier are the main reasons why a social riposte. French VCs. from Cognetas. managers choose this way of financing. >p. 22 > p. 26 > p. 30 > p. 24 PUBS 29/05/07 18:34 Page 7 003-003editorial-tableofcontents.qxd 29/05/07 17:54 Page 3

B TALKING EDITORIAL | TABLE OF CONTENTS ABOUTS

21 Centrale Partners 6 Access Capital Partners 9 Activa Capital 4 A NEW EDITION OF OUR ANNUAL REVIEW OF THE FRENCH PRIVATE AGF Private Equity 6 Alven Capital 32 EQUITY MARKET. We left it buoyant to find it again in an excellent shape. In between, the Amec Spie 36 industry had to face an unprecedented opposition which questioned the very nature of its model. Apax Partners 8 M. Osti Franck Caron, Editor. Although this surge of social contestation spread over Europe and the United States, it has to be Argos Soditic 6 AtriA Capital Partners 5 taken particularly seriously in France considering the country reluctance towards anything that looks Audacia 4 like “pure finance” game. This is the challenge of a successful industry which makes the covers of economic newspa- Auriga Partners 8 pers everyday. Success oblige. By addressing the contestation seriously, members of the industry have shown a maturity Axa Private Equity 6 Banexi capital Partenaires 4 that should help find their way through more troubled time. Batisanté 38 Bretèche Industrie 38 CAAM AI 8 CIC LBO Partners 4 News from France Cognetas 8, 30 04 Cytheris 40 > Sagard raises 1 billions euros in 2006 DailyMotion 40 > French investors pass the 10 billions mark Demeter Partners 6 > New funds for wind farms in France Desjonquères 37 > France Investissement and CDC support the promising SMEs Ed. de Rothschild CP 28 EolInvest 6 Portrait 10 Epsilon Finance 6 > Denis Metzger: a man with moral standards ERYtech Pharma 40 4 Cover story Euromezzanine 8 12 Exalead 40 > CHALLENGES AHEAD EyeGate 40 With allt the Private Equity Magazine’s 2006 league tables Forté Pharma 41 FRR 6 Comments 18 GE Leveraged Finance 4 > LBO debt: have recent legal changes made it a safer job? Gerflor 37 > France, a favourable environment for private equity Go Voyages 38 IES Sinergy 39 Leveraged IFE Mezzanine 8 22 Industri Kapital 4 > The social image of private equity Initiative & Finance 4 KP1 37 Expansion capital Lafarge Roofing 36 24 Laho Equipement 41 > How to live in the shadow of the LBO? LBO France 8 Médica 41 26 Metall Technologie 38 > New IPOs are regaining momentum at “the Bourse”… Private Equity 4, 8 Novasep 37 Strategy OFI Private Equity 9 28 Pasteur Cerba 38 > Edmond de Rothschild Capital Partners: growth accelerators Platina Finance Ltd 6 the Stories RBS 8 30 Sagard 5 > Cognetas transforms Diana Ingrédients Sebia 41 > Newsweb, constructing a web portal for men SeLoger.com 41 Siparex 4 fundraisings, deals and exits tables Sofitel Royal Casino 39 34 Sopromec 6 > A global view of the fundraising market in France Sportfive 41 > A selection of the main deals or exits in France TDF 36 Pictures: DR Triago 9 Business restaurants Turenne Capital 8 Cover photograph: 42 © MARLENE > A selection of the latest reviews of our favorite business tables UFG Private Equity 8 AWAAD/IP3/MAXPPP Un Jour Ailleurs 38 Vacances Directes 39 Via Location 37 SARL Lipari Presse - 100, boulevard de Sébastopol 75003 Paris - FRANCE - Phone: 33 (0)1 40 33 71 93 - Fax: 33 (0)1 40 33 71 90 - [email protected] Vivarte 36 PUBLISHING DIRECTOR: Armelle Escoffier ([email protected]) - EDITORIAL: Editor in chief: Franck Caron ([email protected]) - Journalist: Fabrice Anselmi Investissement 9 ([email protected]) - Art Director:Philippe Abellard (ETIK-PRESSE) - CONTRIBUTORS: Marie Guilhem, Erwan Seznec, Patrick Caroli, François de Soulanges, Weinberg Capital Partners 6 Othman Ferdaous, Emmanuel Rubin - GRAPHIC CONCEPTION: ETIK-PRESSE - Photo-engraving: Magie Bleue, Paris - Printing: Tanghe Printing, B-7780, Comines, Belgique World Flight Services 37 ADVERTISING: contact Coralie Legrand at 33 (0)1 40 33 79 81, or [email protected] Wyplay SAS 40 SUBSCRIPTIONS: contact Sophie Fleury at 33 (0)1 40 33 71 93, or [email protected] XAnge Capital 6 WEBSITE: www.pemagazine.fr Dépôt légal à parution - N° de commission paritaire: 1206 K 85732 - N° ISSN: 1771-3706 - Private Equity Magazine est édité par SARL Lipari Presse, RCS Paris B 478 182 710 - Prix au numéro: 89 euros, 10 numéros par an + hors-séries - Ce numéro est un supplément hors-série du numéro 26 daté de juin 2007. Targets in red

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A NEWS FROM FRANCE

Audacia has just raised a mezzanine 2006. RESULTS fund of 100 millions for SMEs. This new team led by Charles Beigbeder will offer financings between 500,000 Natixis Private Equity increased its profits and 1.5 million euros to companies ll the indicators are pos- now on with Krokus Private of less than 50 million turnover. A itive for the capital in- Equity) and India (with Ze- The structuring of Audacia 1 is under vestment subsidiary of the phyr Peacock). The 89 new the responsibility of Commerzbank, new group comprising the deals represent total invest- which will securitize the shares of Banques Populaires (Na- ment of 464 million euros, the fund for the first 60 investments. texis) and the Caisse Na- with 139 millions additional tionale des Caisses d’Epa- investments and diverse in- rgne (Ixis). Its managed vestments. Eurazeo is near a final closing of its capital has strongly in- The excellent health of first co-investment fund at 345 mil- creased in 2006 and the net Natixis PE is also percepti-

lions for an objective of 500 millions. profits of the group has been DR ble in the amount of funds Eurazeo Co-Investment Partners will multiplied by 2, increasing Jean Duhau de Berenx, president, and Pierre Hervé, secretary general. managed, which has sur- invest, as in in 2006, alongside from 103 to 218 million eu- passed the symbolic 3 bil- Eurazeo for each operation at a 20% level. ros, thanks to a very high with stock market floata- with a major proportion for lions figure (30% of which level of profit which reached tions in expansion and sec- LBOs (50%) and expansion is outside France), thanks to CIC LBO Partners closed 540 millions on all the man- ondary LBOs (and the latent (39%), as well as increasing a series of fundraisings of in 2006 its fund for the aged portfolios, with 404 mi- profit have increased glob- internationalisation: 22% of 933 million euros. Of this French mid-market at the llions for Natixis PE’s own ally from 346 to 399 mil- investment have been made total, 300 millions have been fund. Expansion capital and lions). in Europe (Germany, Italy allocated to the new fund of level of 135 million euros transmission operations con- Investments have also and Spain) and 9% in the funds activity, where Natixis (initial target of 120 millions). tributed 47% and 39% re- reached exceptional levels, merging economies, notably and the European Invest- Sponsored by CIC to the tune spectively of this amount, at 603 millions, there also China, Brazil, Poland (from ment Fund invest together. of 23%, CIC LBO Partners has already made 4 deals on Carré Blanc, Sateco, Tréfilac- FRENCH PE. HISTORIC PLAYER tion and Europe-Snacks.

It has been a very good Very good results for Siparex in 2006, year for Banexi Capital Partenaires, with 9 deals and a new start in venture made and 93 million euros iparex has experienced between 2 and 10 millions, Returns to investors amou- invested. Notably MBOs on S an excellent year in and an equilibrium be- nted to 140 million euros Paprec, Bretèche Industrie, 2006, with a strong increase tween majority Lbos (for inclunding 76 millions of and Numalliance. in transfers (+64% at example CMR), owner buy- profit, the highest level The French fund also 181 million euros) having outs (Comat) and expan- since the creation of the counted 10 exits for a total led to attractive gross profit sion capital (Jalmat). group thirty years ago. Af- …NEWS FLASH… of 103 millions. (94.5 million euros) and Southern Europe, cho- ter having raised Siparex maintaining investments at sen as a strategic develop- Midcap (for the bottom Industri Kapital has open a Paris 73 millions, a slight reduc- ment axis since 2003, has end of the market) to office under Dan Soudry. The team tion due to venture funds also been a happy hunting 124 millions in March 2006, led by Chris Masek for France has made having almost entirely been ground with deals made by the team launched Siparex invested. The group insists the branches in Milan MidMarket II at the end 8 investments up to now, including 5

on its independent expan- (Vimec and TecMo), and of 2006 (already 100 mil- DR complete exits (Laho Equipement, Fives sion capital activity and Madrid (Neumaticos An- lions in promised subscrip- Dominique Nouvelet, chairman Lille, Labeyrie, Consolis-Bonna-Sabla, transmission based on the dres). This activity has tions). of the board. Idex). IK is preparing to raise a sixth fund French mid market (68% brought in the best returns Otherwise, the group for 1 billion euros. of equity generated). with total exits of 143 mil- has announced the relaun- year, the team led by Paul- On these activities, the lions in IPOs (Mastrad, ching of its venture capital Louis Santy invested Luis Mayans, a Spanish analyst took investments have reached Medicrea) or secondary activity with a new fund 12 million euros, notably over the head of GE Leveraged 52.5 millions (+12%), with LBOs (Outinord, AlteAd, raised in 2007, hopefully of for the account of its man- Finance in France. The bank has invested 15 new investments valued RMF/Royal Moto France). 100 million euros. Last aged FCPI, via 2 new par- 1 billion euros over two years in the French ticipations and 17 follow- market as co-arranger (Cegelec, Consolis) ons. Exits totalled Activa Capital raised 315 million for mid-caps 28 million euros (with a or underwriter (Deutsch Group, Elior, etc.). Activa Capital closed its second small group of new institutions for the appetite of its LPs for co- profit of 11 millions). Local fund on 315 million euros. It took and family offices from France and investments. It will keep on with investments (regional Initiative & Finance has beaten its only a few weeks for the house the rest of the world joined Activa its strategy of investing across all FCPRs and FIPs in Rhône- own record for investment in 2006, funded by the Diehl brothers , Capital II to nearly double the size sectors in France, with a strong Alpes, Bourgogne, Fran- at 35.2 million euros, with 7 new Charles and Michael, and Jean- of the first fund (162 million euros focus on food and consumer che-Comté, Auvergne) are participations including Duralex Peintures, Louis de Bernardy to collect that raised in 2003). Consequently, goods, business and support also progressing. Alden, Filorga or Charlott’. The SCR has amount as all the investors Activa Capital will raise the services, healthcare and Finally, this year will be also made 14 exits, including Staci or (institutions and family offices) in maximum size of its targets to 200 pharmaceuticals. the one for new partner- Geoxia, for 48.9 million net plus-value. the previous fund recommitted. A million euros, particularly to cater Legal advice : SJ Berwin ships in emerging countries, notably the Maghreb.

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NEWS FROM FRANCE B

CLOSING. FRENCH SPEAKING MID-MARKET Sagard raised 1 billion euros he young team at Sagard, families have contributed and 3 exits: Vivarte, Groupe DR T who had already raised 710 million, alongside the Moniteur and AFE. Rapid some 600 million euros in institutional investors: still exits, approved by the man- 2003, have finalised their the Caisse des Dépôts du agement when objectives second fund and achieved at Québec, the were reached faster than the end of 2006 the biggest for municipal employees in expected. “Our mid-market closing by a French fund this Ontario, CSFB and Crédit position is favourable for the year of around 1 billion Agricole, but also Prédica, evolution of the market, euros, still aimed at the mid AGF, Standard Life and commented Didier Pineau- market LBO. It will soon be Pantheon Ventures. From Valencienne, president of four years that the polar bear now on, the funds will be the investment committee: firm has won an incon- invested in companies val- there were only 400 glob- testable market share in this ued between 150 and alised industrial sectors ten sector (see league tables, 700 million euros, based in years ago, today there are pages 14-15) and had no French speaking Europe more than 10,000. So the need to make many exits to (with the advantages of small and medium-sized convince its investors, two- proximity and culture), and companies have not always thirds of which remain the business plans marked with got the means to stand up to great industrial families. strong growth perspectives. this movement alone. Apart from the Desmarais Since 2003, these 12 pro- The new vehicle has family, at the origin of the fessionals have made, with already made 2 new acquisi- creation of funds, we also the aid of the aforemen- tions with Aliplast (alumini- find families present in the tioned families, 12 acquisi- um sections for doors) and first fund (Peugeot, Das- tions: Faiveley Transport, Desjonquères (health con- sault, Frère, Halley, etc.), HMY, CEPL, Médi-Parte- tainers and cosmetics). and 3 new ones, “all mem- naires, Kiloutou, Souriau, bers of the CAC 40”. The RLD, Dépolabo, Olympia, Jocelyn Lefebvre, Frédéric Stolar, Chris Spencer, Antoine Ernoult-Dairaine: the partners of Sagard Private Equity.

2006 FIGURES. AFIC-PRICEWATERHOUSECOOPERS French investors pass the 10 billions mark

he annual PwC study on rope outside France has 12% nothing to get alarmed about, year, originating for 59% from T French private equity in- of operations, the rest of the as this sum remains markedly France, 24% from the rest of dustry has been concluded for world has 4%) diminished by superior to the one for 2003 Europe and 17% from the rest 2006 with a new record: 8%. A statistic indicator about (2.15 billions) and 2004 of the world. The type of LPs is 10.2 billion euros invested by the state of the market is the (3.14 billions). Exits towards stable, with compa- funds which are AFIC mem- figure for exits in 2006: if their corporate groups remain the nies and banks remaining the bers in 1,376 companies, that is number has been more or less preferred way (196), beating main providers of funds, with an increase of 26% by value stable (971 against 960 in sales to managers (171) and 19 and 18% of the funds and of 10% by number of 2005), their value has dimin- IPOs (129). raised. An increase of family of- deals compared with 2005. All ished by 10% by value calcu- Finally, the fundraising has fices and funds of funds can be stages of investment gain in lated by their historic entry known a slight slowing down observed, passing respectively value, with an average amount cost, from 4.25 billions in 2005 after having grown in 2005: from 12 to 18% and from 10 to of 12.5 millions against 10.6 in to 3.8 in 2006. However this is 10.28 billions against 11.95 last 18% of the total. 2005: seed capital-creation (+11%), the LBOs of more DR Patrick Sayer, chairman of French than 100 millions (+8%), and venture capital association (AFIC). CLOSING. MID-SIZED FRENCH COMPANIES above all the LBOs of less than 100 millions (+57%). developing innovative or tech- In number of deals, expan- nological activities. The origins AtriA PE Fund III raised sion registers the largest in- of dossiers have changed little: crease, from 402 to 481 86% of the sums invested are 300 millions in a flash (+20%), and stays ahead of the for new dossiers. Concerning other sectors with 35% of the domestic investment, private triA Capital Partenaires great institutional investors 200 million euros. And still total number of companies equity is even stronger: 8.4 bil- A has in three months raised who were already present ear- with the AtriA, the entrepre- supported. This predominance lions have been invested, that is its third fund for 300 million lier. This third fund managed neur’s club which brings to- of expansion capital is reflected an increase on 2005 of 37% by euros. The initial objective of by the Dominique Oger team, gether 50 heads of companies, in the spread of investments: value and 7% in number, the 250 millions has been raised to who have since provided in- with all their abilities and net- 79% for SMEs of fewer than Ile-de-France drawing in 48% be able to bring in new institu- vestors with a net IRR of 20%, works from different sectors of

250 employers and less than DR of the investments. On the tions like Altius Associates, Cal- will pursue his investment strat- activity. AtriA controls 625 mil- 50 million euros turn-over, and other hand, the sum of opera- STRS, LGT Capital Partners or egy in majority LBOs on enter- lion euros through manage- more than 40% are companies tions carried out abroad (Eu- Pantheon Ventures, alongside prises worth between 20 and ment in 3 funds.

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A NEWS FROM FRANCE

Weinberg Capital Partners, founded CLOSING. INTERNATIONAL VOCATION in 2005 by Serge Weinberg (former- ly PPR) has already taken over 5 mid-sized companies: Pharma Omnium (pharma- Big success for 21 Centrale Partners fundraising ceuticals), Alliance Industrie (automobile), Centrale Partners 2002). Gérard Pluvinet has 150 millions) by having less Team Partners (computer services), Sasa 21 closed its new FCPR, been able to keep the trust of recourse to syndication with Industrie (food cooking), Via Location 21 Centrale Partners III, at investors in previous funds an average ticket of 20 to (hiring of industrial vehicles). It was closed the level of 330 million euros (48% of the total) and to en- 30 millions. It is one of the at 420 million euros at the start of 2006. (well over the objective of large the circle of other Eu- rare European players on 250 millions). The former ropean and American LPs this part of the market to Société Centrale pour l’In- (including the pension fund have carried out so many in- Sopromec has relaunched a policy dustrie, merged in 1998 with of the State of New York). ternational style build-ups. of active investment under the direction the Alessandro Benetton 21 Edizione Holding still brings While one of the last exits of Patrick Grumelart, the Pelican group Investimenti company (also 4.5% of the funds. had brought 4 times the having set him the task of investing in fundraising in Italy), is in- 21 Centrale Partners outlay to investors, the third DR small companies with minority positions. creasing in scale after having Gérard Pluvinet, 21 Centrale Partners. will carry out 10 to 15 sig- fund has already been in- raised 200 millions for nificant operations on the vested in 4 participations: XAnge Private Equity France in the past (80 mil- in 1999 and 100 millions for mid market (Enterprise Vulcanic, Interflora, Bati- launched a new lions for 21 Développement 21 Développement II in Value of between 50 and santé and Atos. expansion capital fund called XPansion already with CLOSING. EUROPEAN 35 million euros (objective 75 million). The GP, created in 2004 to invest in venture in 380 million euros for AGF PE Holding IV parallel with the SCR XAnge GF Private Equity has ing IV-Europe (310 mil- ment, which will be more Capital (La Poste group), A announced the closing lions), and AGF Private Eq- orientated towards mid enlarges its intervention with of its fourth fund of funds at uity Holding IV-France market LBOs and invested the idea of accompanying the 380 million euros, against (70 millions), funded by by priority in local funds, is companies close to its sector – an initial target of 300 mil- CDC, AGF and the CNP as already committed at more “the world of exchanges” – lions. This FCPR is struc- part of the France Invest- than 70%. A good reason in their development or tured in two segments: ment programme (see pa- for launching AGF Private transmission. With 15 to AGF Private Equity Hold- ge 8). The European seg- Equity Holding V (with an 20 targets valued between 5 and 50 millions, in several AGF Private Equity, from venture to seed capital DR sectors notably the energy, Christophe Bavière, for AGF PE. Faced with light inflation in the most important venture capital last year, with a third in biotech and sustainable development and financing rounds provoked by the influx of liquidity bio-pharmacy, where they also have a slightly off beat objective of 350 millions), eco-technologies. (notably in biotech), the venture capital team of AGF approach: on niche products and domains, where first offered exclusively Its venture capital company, PE (300 million euros managed with 10 FCPI) wants investments of 10 millions between all the rounds to investors of the earlier XAnge Capital, has further- to reposition its strategy into less well known areas may allow them to accompany the medicine until funds. The fund of funds …NEWS FLASH… more increased its capital and with more diversified levels of investment. This the marketing authorisation, and do not need an IPO team has so far invested from 50 to 65 million euros. trend should lead it to invest more than before in seed for that. It has successfully introduced Cellectis on 1.7 billion euros in more capital (in Yoono, Criteo, Crocus Techology or 24h00 Alternext in January, but in this case for developing than 125 funds, mainly Argos Soditic has closed its in 2006). The team has invested 32 million euros in the commercialization phase from now on… in Europe. Euroknights V fund at 267 millions to invest between 10 and 50 million euros ENVIRONMENT. RENEWABLE ENERGY by transaction in European mid-market.

Argos Soditic and the data specialist New funds for wind farms Epsilon Finance have launched an and l’Institut Français du fraestructuras FCR, Consen- launched under the aegis of index for unquoted middle-sized Pétrole, this fund has already sus Group and Worldstar 123 Venture, closed at the companies, the first in the zone euro made several investments Ltd, it is the second special- level of 70 millions. The Eolfi (outside the UK). This index, median of the notably in Aerowatt (wind ized fund after Mistral En- team collected these comit- EV/Ebitda multiple, has increased from 6.9 energy), Vergnet (hydraulic ergy I, which invested, since ments from family offices to 9, from 434 transactions considered DR and wind energy), or Paprec 2003, 20 million euros in the and European banks (no- Windfarms: a promising sector (recycling). preliminary phases and stud- tably the Belgian Petercam), between 2004 and 2006. for investments in France. At the start of Decem- ies of windfarm projects. pension funds or insurance irst of all, Demeter fi- ber, Platina Finance Ltd an- Mistral Energy II will also be companies. It has already in- The French national pension fund F nalise its first FCPR at nounced the closing of its invested in expanded aims. vested in 13 windmills which (FRR) has granted Axa PE responsi- above 100 million euros this Mistral Windfarms I (for 56 The Mistral funds ambition are in use and 40 under con- bility for managing a total of 150 million autumn. It will invest in million euros) and Mistral to build, from now until late struction (100 MW). Eolfi euros to be placed in secondary positions companies in the environ- Energy II funds (for 30 mil- 2008, a 500 millions portfo- has also launched for indi- in European and North American funds. ment sector and renewable lion euros). The first one, lio of windfarms (represent- vidual investors a 30 millions It now has to ascribe responsibility for energy, with an investment launched at the start of 2005, ing 200 MW in the United FIP to co-invest with Eolin- 3 others: concerning primary positions on strategy based around ex- is dedicated for building and Kingdom and 100 MW in vest, while preparing a sec- the European markets (lot 2), French SMEs pansion capital. Sponsored managing wind farms. Sup- France). ond fund for institutions (lot 3), North America (lot 4). notably by CDC Entreprises ported by Santander In- Finally, EolInvest, FCPR hopefully of 200 millions.

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LBO France has led several leverage SMEs. NEW FUND OF FUNDS fundraisings in 2006: 152 million euros for Hexagone II, its fund dedicated to small companies, and more than 800 millions France Investissement and for White Knight VII, fund for middle-sized and large companies, whose investment CDC support the most promising SMEs capacity is approaching 2 billion euros with enaud Dutreil, the for- works, aiming for 10 000 bu- co-investment agreements… R mer Minister for the siness angels in 2009 (against small and medium-sized 4 000 at present). Auriga Partners in 2006 raised a enterprises (SMEs), present- For its part, the CDC third fund of 150 million euros, ed on the 9th of November has reorganised its capital subscribed essentially by historic investors: a mechanism which should investment division: so with Axa PE, CDC Entreprises, FP Gestion, CNP, permit the “reorientation” both its subsidiary CDC Macif, Crédit Agricole, IEF, etc. Auriga of a supplementary 3 billion Entreprises, headed by Jé- Ventures III will keep its strategy to invest euros for dynamic French rôme Gallot for all general in 20 to 25 start-ups with strong small and medium sized interest activities (from seed technological content in the IT enterprises through a sub- capital to small LBOs, with scription system to the fund 1.2 billion managed), and and health sectors. of funds. The Caisse des also the other subsidiaries. Dépôts et Consignations DR CDC Capital Investissement Euromezzanine has raised (CDC), along with CDC Jérôme Gallot, new chairman René Ricol head France Investis- headed by René Maury of CDC Entreprises. sement orientation comittee. 660 millions for its fund V Entreprises will thus pro- (1.8 billion under manage- in 2006. The management vide 2 billion euros over six cific structure for welcom- le programme” with the ment) reunited the ex-CDC company Euromezzanine years, that is on average ing CDC and CNP in its “growth enterprise statute”, Entreprises Services Indus- Conseil, now independant 300 millions a year, partly funds of funds AGF PE which since 1st January per- trie devolved for expansion from Natixis (only 15% of its thanks to the doubled activ- holding Europe IV (see else- mits SMEs who have under- capital and small LBOs with capital since 1999). ities of PME Innovation, where), Axa, Groupama, gone more than 15% the ex-CDC Entreprises Euromezzanine V invests on which already invests Natixis BP, the Caisses growth of their salary bill for Capital, for mid-market continental Europe and mid 150 million euros a year in d’Epargne group and the two years to benefit from LBOs. The Fondinvest com- regional funds and direct Société Générale. This pro- frozen company tax. There pany, which manages funds market enterprises valued co-investments, and in part gramme will amply fulfil its is a third programme for of funds for third parties between 50 and 500 million through private investors role if it can finance small supporting business (1.2 billion euros), has seized euros, with financing from associated with the pro- funds, present notably in “angels” with the creation of its independence this winter 5 to 80 million… gramme controlled by René new sectors such a renew- a “business angel company” and CDC Innovation, which Ricol: AGF, which was the able energy… statute, with fiscal and budg- manages the FCPI and other In 2006 IFE Mezzanine first to substantiate its com- In parallel to this, the etary aids, plus financial sup- private venture funds, are in also finalised its second mitment by creating a spe- state has created the “Gazel- port to constitute these net- the course of doing so. fund for 300 millions. This leverage dedicated to mezzanine debt investments LISTED PRIVATE EQUITY. NEW PLAYERS …NEWS FLASH… for mid-caps in France and continental Europe Apax and Turenne with new quoted vehicles has already been engaged for more than 150 million euros in about a dozen deals: on the 5th of December. Its cle, Altamir Amboise, with a floated, in order to be Kermel, Frères Blanc, Marc Orian II, raised 18 million euros com- final target of 1 billion euros, quoted on Eurolist B. In Cegelec II, etc. pared to 119 millions for and consequently a much 2006, Altamir and Amboise Amboise on . A more liquid value for the invested in 7 co-investments: Name changed this year for: system of shares with equity market. This merger will France Telecom Mobile - CPR Private Equity, fund of funds warrants (BSA) should per- soon be followed by an in- Satellite Communications / manager for Crédit Agricole Asset mit it to double the size of crease of capital of 120 mil- Telenor Satellite Services, Management AI, became Crédit Agricole the fund between now and lion euros, bringing the Prosodie, Equalliance, Asset Management Capital Investors 2008. Like the Apax ve- stock market capitalisation Odyssey FT and Royer. Al- hicule, Turenne Investisse- of the new structure to tamir Amboise should invest (1.2 billion euros under management), ment has benefited at its in- nearly 370 millions, 95% 150 million euros in 2007. - Nord Europe PE, a subsidiary of Crédit troduction from a transfer of Mutuel Nord Europe, became UFG Private already invested portfolio Equity, several months after notably companies (WH Holding- RBS starts the year in style launching a common fund with Schroders Webhelp and SGM/Aston DR (Diadème Global Selection FCPR), François Lombard, chairman Medical) to limit the propor- RBS leveraged finance has begun the year on the up and up… - the French team of Electra Partners of Turenne Capital Partenaires. tion of sleeping capital while After a less extraordinary 2006 than previous years (see league Europe also became Cognetas, awaiting the first invest- tables page 15), the French team now led by François Guichot- - Natexis PE became Natixis Private Equity uch as Apax Partners’ ments coming at the start Perere and Geoffroi de Saint Chamas have arranged the LBO as part of the merger between Natixis-Ixis S creation of Amboise In- of 2007. debt on Vivarte (with Charterhouse), Aliplast (with Sagard), CIB and CDC’s departure from the capital vestissement in March 2006, For its part, Apax Part- Desmet Ballestra (with Barclays PE) and Desjonquères (with Turenne Capital launched ners has just fused Amboise Sagard and Cognetas), as well as the new recapitalisation of of the Caisses d’Epargne. Its subsidiary on Alternext the SCR Tu- Investissement with its pred- Frans Bonhomme. All this represents a total debt of 4.9 billion Spef Venture also became Seventure. renne Investissement, dedi- ecessor, the SCR Altamir, in euros as arranger and 5.2 billions as bookrunner. cated to expansion capital, order to make a bigger vehi-

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NEWS FROM FRANCE B

CLOSING. FUND OF FUNDS WITH A DIVERSIFIED APPROACH Access CF III raises 307 millions for European mid-market

ccess Capital Partners at date renewed to manage the A the end of December pension funds for the State of achieved the final closing of its New York for 250 millions, third fund for the European which brings the specific mid-market, Access Capital mandates to manage alloca- Fund III MMBO, reaching tion for the major institu- 307 million euros, against an tional investors to 7. initial objective of 250 mil- Founded in 1999, Access lions. The geographical distri- Capital Partners has subse- bution of the investors had a quently performed convinc- good share of American insti- ingly with its original strate- tutions (32.7%), Northern gic choice based on rigorous Europeans (31.9%), French selection – according to (24.9%) and German (7.1%). track-record of the funds, The pension funds, insurance but also the approach to companies and family offices deals, underlying portfolio, are the three principal kinds of as well as a long term moni- sponsors. The fund of funds, toring and a privileged which invest in GPs dedicated relationship with the funds

to European growth mid- DR management teams. market, already holds posi- Dominique Peninon, Agnès Nahum et Philippe Poggioli, partners of this original european fund of funds. tions in several funds, 3 from secondary transactions. This brings to 1.65 bil- LISTED PRIVATE EQUITY. LARGE CAPS lion euros the funds managed by Access Capital Partners. Wendel sees its results continuing to progress At the same time, the team led by Dominique Peninon, endel Investissement 2006). Dividends for share- Dutch AVR (rubbish treat- March 2007, against 82 euros Agnès Nahum and Philippe W has announced a holders inscrease by 21%. ment). It pursued its invest- at the end of December 2005. Poggioli have closed their 363 million euros net consoli- In 2006, Wendel made ment build-up policy by in- Having multiplied its market fund dedicated to invest- dated result for the group, an 4 acquisitions, 3 of which were vesting a supplementary cap by 5 since 2002, it com- ments in technology (start- increase of 23% from the pre- international: Materis (spe- 250 millions in about 30 oper- mands an available war chest ups, later stage and buyout), vious year, despite the absence cialty chemistry for the con- ations, notably for Editis and of 1 billion euros and intends Access Capital Fund III of exits in 2006 (the last one struction industry), Stahl Bureau Veritas. Wendel’s to invest nearly 3 billions of its Technologie, for 85 million was the sale of Wheelabrator (leather treating), Deutsch NAV has thus risen to 117 eu- own funds by 2012, as well as euros. It has also had its man- Allevard to LBO France in Group (connectors) and the ros a share at the end of 2 billions for external growth.

PLACEMENT AGENT. A PIONEER Triago celebrates 15 years of successful fund raising

merous “captive” European Its data base of 10,000 LPs clients in regard of the size the market on both sides of VCs, it was Antoine Dréan with 3,000 contacts kept up and perspective of funds. the Atlantic. who launched Triago in Paris to date monthly includes In the last three years, the Now the only independ- in 1992 as pioneer and now 500 permanent active in- Triago-X team has also ad- ent player of this magnitude, one of the world leaders for vestors, a third of whom are vised on more than 350 sec- Triago will soon open a third placement agent (with Triago family offices. This is what al- ondary transfers of all kinds, office in Dubai (managed by Advisors) and secondary lows them to “choose” their thanks to a global vision of Jean Aboumrad). transactions of private equity funds (with Triago-X). In fif- teen years, the fundraisings OFI Private Equity is looking towards the market adviser have accompanied OFI Private Equity should raise 75 million euros on the Olivier Millet (former 3i, subsequently Barclays PE) offers more than 120 major opera- Eurolist in the near future. It is a new start for the quoted a risk-return couple calculated to suit the needs of new tions for clients who have of- vehicle and is aimed at reinforcing its investment entrants such as insurance companies and pension DR Antoine Dréan, founder of Triago. ten become benchmarks: strategy in secondary LBOs valued between 15 and funds: this fund of funds is structured in two sections. AtriA, Bridgepoint, Cevian, 75 millions on the French market. This subsidary of asset 80% of OFI Europa I is managed by Access CP and id you know that it was a Entreprise Investors, Eu- manager Ofivalmo (an association of insurance invested in European mid market buyout funds and D Frenchman who in- razeo, GSC, Kelso Place, companies) already manages above 100 million euros. mezzanine debt funds. The remainging 20% is directly vented the profession of WLRoss, etc. The rate of mis- In addition, OFI Private Equity, launched its fund of funds invested by OFI PE in secondary LBOs. Over the last year, placement agent? Having no- sions reaches about a dozen a OFI Europa I, with a first closing at 30 millions in 2006 OFI invested 30 million euros in equity and/or mezzanine ticed the hesitant urge to- year since the opening of an and a final objective of 100 millions. The team led by in 5 : Axson, MSI, Credirec, Marco Polo Food… wards independence of nu- office in New York in 2004.

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 9 010-010portrait 29/05/07 17:28 Page 10

A PORTRAIT

FINANCE AND COMMUNITY A man with moral standards

Analytical rigor, professionalism turning independent in 2001, landmarks when the new shareholders and enthusiasm have let wish to concentrate on two Denis Metzger build one > 1975 distinct sectors, the small caps and the big Lbos: which no graduated from Sci- longer corresponds with his of the most experienced teams ences Po Paris and vision of the market. In a spir- degree on the French market. it of friendship and with the in economics Morality and emotion, that is support of Charterhouse’s > 1976-1977 managers, Denis Metzger and what comes to mind when he joins Sofinnova as his partners negotiate their analyst economics; departure. is asked to talk about himself. PhD in economics The Chequers Capital sto- (Paris Dauphine) ry is starting. With the sereni- > 1977 ty of an extremely tight knit o explain the direction which life military service, team which is amongst the takes, there are often key encoun- working as com- most experienced in the mar- T ters. For Denis Metzger, meeting mercial attaché, ket, but with no little appre- Christian Clefty, one of the founders of at the French hension, they confront the Sofinnova, certainly counted greatly. By ask- embassy in Bombay raising of a first fund without ing him to write a report under the aegis of > 1978 a sponsor. Closed out at the European Commmunity to promote the MBA at Insead 300 million euros, this fund is private equity industry, he hijacked this > 1979 subscribed 8 times over. Its enthusiastic economist from working for the joins JP Morgan successor will bring together State, to which he had been destined. So he as an investment 600 million euros in less than joins Sofinnova, discovers investment and four months in early 2006. officer in New York Denis Metzger is commits himself to venture. and London, where enthusiastic about The humanitarian basis Once he grows certain of his choice, the he supervises economics, venture, necessity for a more practical education technological Third World… If there is another meeting leads him to Insead and open doors for him investments; DR in finance, Anglo-Saxon style. At the time, participates in the it was a different world. For four years, he creation of Action makes technological investments for JP Contre la Faim (ACF) “Expansion capital depends less on financial Morgan at New York and London. This was > 1984 a decisive experience as it gave him a per- ingenuity than on identifying enterprises joins Chaterhouse manent taste for a kind of pragmatism in the in France as direc- way business is conducted. Homesickness which succeed.” tor, then general brings him back to France. Private equity is manager and just going through its first operations and it which are as different as Formula 1 and which has counted a lot for Denis Metzger, president is with an English team that he turns for Swiss watch-making. The movement from it is with Jacques Attali. Alongside Françoise pursuing his career of investor. Alongside > 2001 one to the other will not prove simple for Giroud, Bernard-Henri Lévy or Guy Sor- Michel Klibbeler, president of Charterhouse creates an inde- many teams. man, they create Action Against Hunger France, they will make it a vital player in pendent fund dedi- Belonging to the subsidiary of a bank (Action Contre la Faim) together in 1979. French capital investment and will survive cated to the mid also implies submitting to changes in share This young enthusiast for the Third World the great transformations in their profession. market, Chequers holders, and often in strategy. In his case, the will try and adapt some of his methods The opening toward management for third > 2002 purchase by the CCF, itself then subject to learned in the venture for it, which will parties is an important stage. Four funds will raises a first fund of a takeover by HSBC, will see the managers notably result in the creation of 400 micro be raised following the bank’s decision to 450 million euros finding themselves rehired, and the spectre enterprises. With them, he will live through disengage, including Initiative & Finance, > 2006 of intervention varied from the most ran- some of the decisive moments of his life out- the first French LBO fund, and Medial closes the second dom to the most specialised. But there were side his job. Some mark him permanently. which would bring Chaterhouse and BNP Chequers capital no hard feelings as the team built up in the A commitment which has stayed the into association. fund at 600 million 90s were raised in the values which Denis course as today he presides over the associ- It is also the great period for expansion euros. Metzger puts high up on his own personal ation, as well as Unogep, which encourages capital, a profession which depends less on scale: analytic rigor, professionalism and public generosity. He also helped the lawyer financial ingenuity than on identifying enter- enthusiasm for sustaining entrepreneurs. It Jean-Luc Bedos for a time in creating Droit prises which succeed. The perfect product- is for this that Gonzague de Blignières and d’Urgence. Doubtless he will place the same market balance just where the LBOs are Dominique Gaillard will come, as a rite of values of rigor, high expectations and moral more concerned with the equilibrium of passage, to enrich their education. And it is duty at the disposal of the collective. ■ price and future cash flows; two professions this team which will make up the basis for Franck Caron

10 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | PUBS 29/05/07 15:36 Page 5 012-017coverstory DER 30/05/07 10:47 Page 12

A COVER STORY

With investments in French unlisted companies increasing of 26% in 2006, this market experienced a new record year. Even venture capital regained a strong momentum. Now, is the time to face a few challenges linked to these successes, however challenges which are common to all players in Europe. Challenges ahead

t is obvious to any observer taxations. But these are minor questions. Seed and venture capital were also at of the French private equity The bulk of what it takes for the industry the party with an 11% increase. Can we industry that 2006 was to play its role as a new class of financial draw the conclusion that the future of the another record breaking investors is there. And its influence reaches industry is a cloudless sky? It would proba- year. Second market in farther than the big LBOs that are much bly be a step too far as it will have to face a EuropeI and first on the continent, it shows talked about. few challenges which are common to all all the robust fundamentals of a market that In 2006, 80% of the firms financed by players in Europe. has reached a certain form of maturity. In a private equity fund had a staff with less The first will be the end of an econom- this regard, the European venture capital than 250 people and a turnover smaller than ic cycle marked with a world liquidity that association (EVCA) recently conducted a 50 million euros. From the 10,2 billions has benefited the big debt consumers. Once study that ranked France as the most invested during that year by members of the it will become impossible to put the same favourable environment for private equity in French professional association AFIC, the level of debt in LBOs, the question of Europe (see page 20). most dynamic segments were transmission improving operational efficiency will regain Needless to say that there is still some (LBO smaller than 100) and expansion cap- its predominance. And there is no doubt room for improvement, notably regarding ital for the number of deals. that the performances of the funds will suf- fer even if most of them already pay a lot of attention to that aspect of the value they can create. The social impact The second challenge is the growing opposition it faces from workers unions and to a larger extent its social acceptability. One of the LBO under the microscope could have thought considering the history ompared with “financial high fliers… three and a half year average tenure of a only 20% of other employees. of social relations in France that it would Cmaking and unmaking local or company by an LBO fund in France, job Encouraged by AFIC, it nevertheless lead the protestation in Europe. However, it national economies”, by Philippe creation apart from external growth is allows for a reduction in the rate of is not in France that the most vociferous Matzkowski, founder of the LBO 5 times stronger than the national absenteeism and the job turnover, which voices to question the action of private equi- Collective, the private equity players have average (+3.2% a year against +0.6%). shrinks from between 1.12 and 3.7 ty funds were to be heard but elsewhere in understood the danger and come back The financial conditions improve much points in the companies concerned, Europe and in the States. France is not with arguments sustained by figures.The more with the LBO for salaries (+3.3%), against 0.54 and 2.16 over the entire immune to it though. It’s been mixed to French venture capital association,AFIC, stock-options (20% des enterprises) and sample.As for a more equal distribution some negative reaction towards some very thus had the Constantin practice carry company savings plans (60%). of profit,AFIC and the administration well paid management packages and also out a study which, while far from being Participation in capital involves 100% of now incline towards a possible to questions of cost reduction and moving exhaustive, indicates that during the managers, 61% of middle managers but reglementation of private equity. production units abroad. As most of the economic matters end up in the hands of

12 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 012-017coverstory DER 30/05/07 10:47 Page 13 Jacques Charles

GRANDS PRIX 2007 OF PRIVATE EQUITY MAGAZINE politicians, not always for the better, the industry has rightly seized the problem and he award ceremony took place in front of an audience of ■ LBO Fund (large caps) of the year: EURAZEO tries to address it in the best of its interest. T 500 at the Maison France-Amérique on the 13th of Nominated: PAI Partners The latter lies it seems in its positive effect February 2007.The chairman of the evening and guestspeaker on employment. 10% of the total workforce was Alain Afflelou, chairman of Alain Affelou SA, who founded ■ Debt Provider of the year: CALYON CIB is now employed by private equity owned this optician brand and chain (610 shops today) and has Nominated: BNP Paribas, Euromezzanine, ICG, Natixis companies, which create in proportion already managed two MBO since 1999. 8 «Grands Prix» were more jobs that the average French firm and awarded by PE Magazine to 9 teams who have been ■ Partnership of the year: 3i for KEOLIS the big blue chips from CAC 4O. In a coun- distinguished for their performance on the French market in Nominated:Apax Partners for Alain Afflelou SA, try faced with an endemic high level of 2006.The jury was composed of 19 experienced and AtriA for ICM Group, Barclays PE for Gibaud, Bridgepoint unemployment, that surely is an argument recognised professionals. for Médica, Cognetas for Diana Ingrédients, Eurazeo for politicians will listen to. Fraikin, Industri Kapital for Consolis It has also engaged in a process that will ■ Venture Capital Team of the year: permit to share some of the profit generated SOFINNOVA PARTNERS ■ Legal Adviser of the year: by a buyout operation with the voluntary Nominated:Alven Capital,Auriga Partners, Crédit Agricole PE, Mayer, Brown, Rowe & Maw staff through an employee share-ownership OTC Asset Management, Seventure, Sgam AI PE,Ventech Nominated:Ayache Salama & Associés, HPML, Lamartine “Plan d’Epargne d’Entreprise”. By making Conseil, Latham & Watkins, Linklaters, SJ Berwin,Weil Gotshal a shareholder out of each employee, AFIC ■ LBO Fund (small caps) of the year: & Manges expects a convergence of interest. PERFECTIS The final step is to encourage more Nominated: Ciclad, EdRIP,MBO Partenaires, Initiative & Finance, IPO ■ M&A Adviser of the year: ROTHSCHILD & CIE transparency, and to find ways to give “more Nominated:Aforge Finance, BNP Paribas, Lazard Frères substance to a shareholder who often ■ LBO Funds (mid caps) of the year: appears faceless”. From the success of the 21 CENTRALE PARTNERS and AXA PRIVATE EQUITY Sponsors of the evening: OFI Private Equity, AlixPartners, recent years, the challenges ahead are those Nominated:Astorg Partners, Barclays PE, Ayache Salama & Associés, Gatienne Brault & Associés, of a new type of ownership that must prove AtriA Capital Partenaires Grant Thornton. its vitality in all circumstances. ■ Franck Caron

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 13 012-017coverstory DER 30/05/07 10:48 Page 14

A COVER STORY Private Equity Magazine’s

Private Equity Early stage (in M€) 0-30 M€ enterprise value Magazine has GP AMOUNT 2006 DEALS NBR. AMOUNT 2005 GP AMOUNT 2006 DEALS NBR. AMOUNT 2005 1 Sofinnova Partners 74,9 27 52,1 1 BNP Paribas Dév.* 40,0 nc 21,9 ranked the most 2 Credit Agricole PE 37,9 49 24,0 2 Acto 37,2 6 nc active funds in 3 Innovacom 35,7 35 26,9 3 Naxicap Partners 35,5 29 29,0 4 Truffle Venture 31,1 10 16,9 4 Activa Capital 32,2 7 - France in 2006, 5 Seventure 29,8 28 19,8 5 Siparex 31,7 18 20,8 categorized by value 6 CDC Entreprises Innov. 26,9 24 22,7 6 MBO Partenaires 27,8 13 29,0 7 CM-CIC Capital Privé 25,0 31 nd 7 Perfectis 26,9 6 25,3 of the companies 8 Iris Capital 24,0 5 8,0 8 Prado Finance 26,0 5 nc they invested in. 9 AGF Private Equity 21,3 18 13,7 9 Irdi-Icso Gestion 25,3 11 26,4 10 Viveris Management 21,0 20 nc 10 LBO France 22,3 4 -

uring the months of Jan- 11 Sgam AI Private Equity 21,0 24 30,8 11 CIC Finance 22,2 6 14,0 uary and February, our 12 ACE Management 19,7 18 nc 12 IPO 20,1 17 18,0 editors examined 230 pr- 13 EdRIP Bio Discovery 19,4 3 nc 13 Dévelop. & Partenariat 19,3 6 - ivate equity funds which D invested in France in 14 XAnge Private Equity 17,5 21 21,5 14 Initiative & Finance 17,6 9 17,2 2005 in companies of all sizes, and then 15 Auriga Partners 15,7 13 18,0 15 Avenir Entr. Gestion 17,2 21 20,3 ranked them by the total invested in Source: funds, PEM Source: funds, PEM *Not confirmed each pre-defined segment according to the value of each company. One cate- gory – venture – was treated separately as it concerns new businesses. It has € enterprise value € enterprise value been mainly dominated by Sofinnova, 30-75 M 75-200 M which beated his record of investments GP AMOUNT 2006 DEALS NBR. AMOUNT 2005 GP AMOUNT 2006 DEALS NBR. AMOUNT 2005 in 2006. From first to later stages, in 1 Banexi Capital Partenaires61 7 30 1 Apax Partners 153 4 49 biotechs (Stentys, Fovea, Cerenis Ther- 2 * 45 3 - 2 Axa Private Equity 114 5 173 apeutics, Novexel, etc.) as well as in IT (Streamezzo, Inside Contacless, Wyp- 3 Naxicap Partners 37 12 6 3 3i France 106 3 50 lay, etc.), the well-known French fund 4 SG Capital Europe* 35 2 - 4 LBO France 77 2 0 has the distinction of being omni- 5 OFI Private Equity 26 4 - 5 Chequers Capital 74 3 22 present in start-up investments. Regarding the small caps (LBO and EdRIP Winch Capital 26 4 nc 6 European Capital 68 4 5 expansion), BNP Paribas Développe- 7 LFPI-FPG 26 2 25 7 21 Centrale Partners 67 3 0 ment has performed an extraordinary 8 CIC Banque De Vizille 25 6 nc 8 Barclays Private Equity 65 3 157 year, but without being able to break down between 0-30 and 30-75 M€ 9 Perfectis 24 3 - 9 Pragma Capital 65 3 0 deals. Just below, the “surprising” Acto 10 Siparex 22 4 30 10 ABN Amro Capital France 60 2 nc (Finama/Groupama) with 6 tran- 11 Weinberg Capital Partners 60 2 0 sactions in the top of this range, and 11 Axa Private Equity 22 3 14 Naxicap, regular on this part of the 12 Argos Soditic 22 1 25 12 Credit Agricole PE 56 5 24 market where capital expansion and 13 IPO 20 6 24 13 ING Parcom 55 3 40 buyout were not distinguishable. The other national players are Siparex, 14 Atria Capital Partenaires 17 1 57 14 Atria Capital Partenaires 52 2 19 MBO Partenaires, Perfectis, CIC Fi- 15 CIC LBO Partners 16 2 19 15 Industri Kapital 50 1 50 nance, Initiative & Finance, inter- Source: funds, PEM *Not confirmed Source: funds, PEM

METHODOLOGY. These tables show the funds or investment structures in France in 2006 are recaps and unfortunately we cannot always tell which ones are, in fact, partial cash-outs. (closing date) that did deals with companies in the range of value displayed. In each Above € 75 millions: the same approach as for the build-ups. Furthermore, the deals category (a part from debt), the amount of equity is the first benchmark for ranking. Start- we included were intended to be companies whose headquarters or main business activities ups: reinvestments or follow-ons were regularly included in the figures but not always in the were in France; so we were only concerned by the French part of multinational capital. deal references. From € 0 to 75 millions: in all these cases, capital expansion and buyout When not confirmed by the funds, we took the informations gathered from external sources. were not distinguishable. Some reinvestments are build-up deals with new capital invested Not counted for 2006 (because closed in 2007), some important deals as Consolis II, Vivarte in the original target company and in companies of referred category. Other deals included II, Médi-Partenaires II, Lafarge Roofing, Quick, Fraikin II and Prosodie.

14 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 2006leaguetables… 012-017coverstory DER30/05/0710:48Page15 import deals. Novasep weresomeoftheothermajor WFS, Aixam-Mega,Histoired’Or, 2006. GroupeMoniteur, Gerflor, (with KP1)bothclosedabigdealfor (with Sebia)andDoughtyHanson au, RLD,Olympia),evenifMontagu nated inFrancebySagard(withSouri- Point). Arecord. Amec Spie(PAI) andAxaRé(Stone (Cinven), Cegelec(LBOFrance), house), Materis(Wendel), UPC-Noos Europcar (Eurazeo),Elior(Charter- TDF (withTPG),PagesJaunes(KKR), the sceneof9dealsover1Bn The largest buyoutcategorywas the 200-500M There were more dealslastyearin and 3iproved tobe AxaPrivateEquity Apax Partners, In the30-75M last year. nariat madesometurnarounddeals Finance andDéveloppement&Parte- mally inthesegmentjustabove.Prado Activa CapitalandLBOFrance,nor- Irdi-Icso GestionorIPO,andwith mixted withregionalactorssuchas Capital, 21CentralePartners… and theconfirmationswithEuropean com, thenewentrantWeinberg CP, ma, ABNAmro,AtriAorINGPar- Chequers Capital,BarclaysPE,Prag- the usualrealplayersLBOFrance, this partoftheleaguetables.Behind, dealson and ApaxPartnersclosed4 PE confirmediststatusofkeyplayer, Beauty, DéfimodeandEmpruntis.Axa ing onthissegmentwithSelective The formersucceededinitsreposition- ic teamsintheheartofmid-market. regardless. Private Equitywhichdid4deals or AxaPE,andthenewplayerOFI que deVizille, Perfectis,ArgosSoditic Ban- Capital Europe,LFPI-FPG,CIC lead overLBOspecialistssuchasSG cap inexpansiondeals.Theytakethe been activeinturnaround,andNaxi- SNCM andParisSaint-Germain)has etc. ButlerCP(withAccèsIndustrie, Terre, Numalliance,Valority, Brunet, dealsin2006: d’Haussy, France 9 ofits findsitsplacewith7 nexi CP attracted newopportunities.Yet, Ba- to firmsusedthemid-marketand looking abovetheirusualdealvalue, culture: fromsmallcapsspecialists sations whichoftenhaveadifferent mid-cap marketisplayfieldfororgani- € € ■ segment, segment, the mostdynam- Fabrice Anselmi still domi- the lower € : td f9 deals>100M study of95 The LBOdebtproviders leaguetableismadefrom the etc.). Mezz, LFPI,Acto (Mezzanine Management, I A sophisticateddebt ulctn,RBSandNatixisslightlydecreasing (inspite duplicating, Calyon BNPParibas leading, are thesameaslastyear: 6 GP 200-500 M 5LCptl3 - 1 - 100 1 39 1 - - 1 42 - 54 - 1 LCapital 15 1 - 1 100 Charterhouse* 2 14 1 QualisSCA* 70 13 1 59 80 Weinberg CapitalPartners 2 12 59 60 ABN Amro CapitalFrance 11 28 134 165 GildeBuyoutPartners 10 100 84 PPMCapital 9 2 1 3 3iGestion* 8 30 AxaPrivateEquity 7 LBOFrance 101 6 117 130 1 Barclays PrivateEquity 5 BridgepointCapital 4 130 MontaguPrivateEquity 2 Sagard 1 ore ud,PM *Notconfirmed Source: funds,PEM 1IIMzaie2 16 27 47 18 4 7 2 6 - 23 13 - 48 41 40 32 13 6 6 IDIMezzanine 11 14 300 CM-CICMezzanine 62 10 55 IndigoCapital 68 223 9 14 67 Mezzanis 68 8 11 CéréaMezzanine 14 7 AxaPEMezzanine 400 6 190 IFEConseil 5 282 Capzanine 4 European Capital 3 Euromezzanine 2 ICG* 1 GP Mezzanine ore ud,PM *Notconfirmed Source: funds,PEM IFE and Axa PEjointheleaguewithothernewplayers CapzanineandMezzanis. European Capital, mezzanine, CG stillleadonthemezzaninemarket aheadofEuro- ogt asn101- 1 130 Doughty Hanson AMOUNT AMOUNT € € (47 Bn 2006 2006 (in M enterprise value € € EL NBR DEALS of total debt).The first of totaldebt).The EL NBR DEALS ) . . AMOUNT AMOUNT 2005 2005 aqePltn,Brly,IB take astrong position… IKB, Barclays, Banque Palatine, Fortis, SG, Calyon, Natixis, LCL, BNPParibas, CIC, lenders: Private EquityMagazinealsolooked intothesmallcap several large deals. dueto aseveryyear, etc.) is, Barclays, GS, HSBC, BOA, Citigroup, ML, LB, JPM, American lenders presence (MS, others Englishan is theunderperformanceofING.The onlymainchange andSGCIB.The themerger withIxis), of 5Aa ates7 77 - 80 1 1 - - 1 74 - 89 317 1 108 2 1 1 370 ApaxPartners 15 190 Bridgepoint 14 178 - 355 1 BCPartners* 13 - 203 300 AxaPrivateEquity* 12 2 Investcorp* 11 2 300 464 1 - 107 Blackstone* 9 409 Cinven* 600 1 8 4 370 PAI Partners 2 7 Texas Pacific Group* 6 775 LBOFrance 680 5 415 Wendel Investissement* 4 KKR* 3 Charterhouse* 2 Eurazeo 1 GP >500 M 1Ctgop 653(1) 3(0) 1685 3(1) 5(1) 3(0) 1686 9(5) 1731 4(0) 15(5) 2222 1750 14(10) 2950 Citigroup* 11 MerrillLynch 10 5298 2551 19(8) DeutscheBank* 3795 9 LehmanBrothers 20(11) 8 JPMorgan* 6834 7 Morgan Stanley* 6 8025 SGCIB 5 NatixisBP 4 RBS 3 CalyonCIB 2 BNPParibas 1 B debt LBO ore ak,PM *Notconfirmed The figurewithinbracketsindicates the “solebookrunner”role Source: banks,PEM ore ud,PM *Notconfirmed Source: funds,PEM ANK inCptl 0 - 1 203 Lion Capital* ue20 |SpecialIssue June 2007 € enterprise value AMOUNT (> 100M OKUNRPART BOOKRUNNER 2006 | PRIVATE € EQUITY EL NBR DEALS enterprise value) ( IN M € . )D MAGAZINE AMOUNT ASNBR EALS 2005 . 15 League tables 2006 012-017coverstory DER 30/05/07 10:50 Page 16

A COVER STORY

Private Equity Venture/expansion (in M€) 0-30 M€ enterprise value Magazine has FINANCIAL ADVISORS DEALS NBR. AMOUNT QUALITY FINANCIAL ADVISORS DEALS NBR. AMOUNT QUALITY 1 Aelios Finance 16 85,3 ** 1 Aforge Finance 12 326 **** also ranked 2 Chausson Finance 9 41,8 *** 2 Grant Thornton CF 12 192 ** the most active 3 Multeam Conseil 8 10,9 ** 3 Adna Partners 11 82 - 4 Lorentz Deschamps & Ass. 5 47,5 ** 4 Close Brothers 8 254 ** advisors near 5 Bryan Garnier 5 83,2 ** 5 Transcapital 8 91 - private equity funds 6 Opticroissance 5 8,3 * 6 KPMG Corporate Finance 7 178 ** 7 MK Finance 5 8,4 - 7 Opticroissance 7 97 * in France in 2006, 8 Clipperton Finance 4 30,0 ** 8 Capital Partners 7 95 - still categorised 9 Iris Finance 3 6,5 * 9 Societex 7 52 ** 10 Ernst & Young CF (1) 2 31,8 - 10 Intuitu Capital 6 90 * by value of the 11 DRC(1) 2 18,9 - 11 Financière De Courcelles 6 57 ** companies that 12 Grant Thornton CF (1) 2 15,0 - 12 MK Finance 5 10 - 13 KPMG Corporate Finance 2 12,6 - 13 Entreprise et Patrimoine 5 7 - were targetted. 14 Capital Partners 2 4,0 - 14 Lincoln International 4 105 * 15 Cazenove 2 279 * 15 Financière Cambon 4 77 - Here a panorama Sources: advisors, Epsilon Finance, PEM (1)Not confirmed Sources: advisors, Epsilon Finance, PEM (1)Not confirmed of the M&A (or financial) and legal advisors. League tables 2006 fo

uring the months of market is dominated by 2 main actors: the market is dominated, for this seg- ated (this league table does not rank March, April and May, HPML and Lamartine Conseil. But ment, by classical boutiques or mer- the recent networks of M&A advisors our editors also exam- some other firms like Orsay, De Gaulle chant banks like Aforge and Grant which advised very small transactions). ined 400 law firms and Fleurance, Gatienne Brault & Asso- Thornton… We noted that it is On the mid-market, the law firm D 150 merchant banks ciés, Eversheds or the missing Intuity increasingly difficult to account and SJ Berwin (with Maxence Bloch and or “boutiques” which advised private and LB Avocats have made it their spe- check all the deals because even the Christophe Digoy) experienced an equity funds or targets in France cialty. As for the the M&A advisors, smallest are more and more intermedi- incredible year in France. Linklaters in 2006. There were ranked by num- ber of deals in each pre-defined seg- ment according to the value of each € € company. Venture/expansion (in M ) 0-50 M enterprise value One category – venture/expansion LAW FIRM DEALS NBR. AMOUNT QUALITY LAW FIRM DEALS NBR. AMOUNT QUALITY capital – was treated separately as it 1 Jones Day 27 236 *** 1 HPML (1) 37 300 *** concerns all the businesses without (2) (1) leverage. For the legal advisers, it has 2 Orsay 24 213 * 2 Lamartine Conseil 21 180 ** been mainly dominated by Jones Day 3 Chammas & Marcheteau (2) 20 80 *** 3 Ernst&Young LF (1) 11 220 * (team led by Olivier Edwards and 4 SJ Berwin 15 194 * 4 De Pardieu Brocas Maffei 9 214 * Renaud Bonnet) and Orsay (with (2) Samira Friggeri and Frédéric Lerner). 5 Gide Loyrette Nouel 15 141 ** 5 Orsay 9 120 ** Some other law firms like Chammas 6 De Gaulle Fleurance (1) 15 30 * 6 CMS Bureau Francis Lefebvre8 147 - & Marcheteau, Gide Loyrette Nouel 7 UGGC 13 71 * 7 De Gaulle Fleurance (1) 880- or SJ Berwin are also recognised in this speciality. In M&A, those who are spe- 8 Deprez Dian Guignot 12 113 * 8 Ginestié Magellan 7 192 * cialised in raising funds for start-ups, 9 Alerion 12 74 ** 9 Ayache Salama & Associés 7 182 ** such as Aelios (Pascal Mercier), 10 Pinot De Villechenon 10 69 ** 10 UGGC 7 97 - Chausson Finance (Christophe Chau- sson) or Multeam Conseil (Paul 11 Valluet-Achache (1) 970-11 Lefèvre Pelletier & Associés 6 172 * Berrux), are well paid by this league 12 Hammonds Haussman (1) 921-12 Lovells 6 140 * table. Banks like Bryan Garnier or (1) 13 SJ Berwin 6 113 ** Cazenove would have win in value for 13 Lamartine Conseil 841* IPOs they advised… 14 Kahn & Associés 7 85 - 14 Clifford Chance 6 98 * What about LBOs? Regarding the 15 Grand Auzas 7 13 - 15 Latham & Watkins 5 140 ** small caps, the French legal advice Sources: LF, PEM (1) Not confirmed (2) Based on public deals Sources: LF, PEM (1) Not confirmed (2) Based on public deals

16 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 012-017coverstory DER 30/05/07 10:50 Page 17

METHODOLOGY. These tables rank M&A 50-500 M€ enterprise value >500 M€ enterprise value and legal advisors for private equity transac- tions in France in 2006 (closing date). M&A FINANCIAL ADVISORS DEALS NBR. AMOUNT QUALITY FINANCIAL ADVISORS DEALS NBR. AMOUNT QUALITY advisors are mandated on the buy or sell 1 Rothschild & Cie 27 4579 *** 1 Rothschild & Cie 9 10830 *** side by a PE fund or the target company. 2 Aforge Finance 16 2185 **** 2 Goldman Sachs 6 8712 * Lawyers are corporate advisors. For each 3 Lazard Frères (1) 11 2566 *** 3 Lazard Frères (1) 6 8486 *** category, the number of deals was the first benchmark for ranking, before the total 4 BNP Paribas 11 2114 ** 4 JP Morgan Chase & Co 6 7470 * amount in value. The number of stars indica- 5 Close Brothers 11 1346 *** 5 BNP Paribas 5 11150 * te how funds (as clients) evaluated the qua- lity of these advisors. Venture/expansion: 6 PwC Corporate Finance 8 1107 ** 6 Morgan Stanley (1) 5 10666 - reinvestments or follow-ons are included 2006 League tables 7 Grant Thornton CF 6 597 ** 7 Deutsche Bank 5 9215 * in the figures. From 0 to 50 M€: build-up 8 Ernst & Young CF 5 459 ** 8 HSBC 4 8715 ** deals are counted when declared, along with turnaround transactions. Above 9 JP Morgan Chase & Co (1) 4 1197 * 9 Lehman Brothers 4 7250 ** 50 M€: same approach as the build-ups. 10 UBS Inv. Bank 4 972 ** 10 SG CIB 4 6550 * Furthermore, the deals we included are com- 11 HSBC 4 689 ** 11 Citigroup 3 5490 * panies whose headquarters or main busines- ses are in France; so we are only concerned 12 SG CIB (1) 4 456 - 12 Calyon CIB (1) 3 3320 * by the French part of multinational capital 13 Lehman Brothers 3 787 * 13 Hawkpoint 3 2670 * or activity.When not confirmed by the 14 Wagram Corporate Fin. 3 450 ** 14 Merrill Lynch 2 8200 - advisors, we took the informations gathered from external sources. Deals not counted for 15 Deloitte CF 3 403 - 15 UBS Inv. Bank 2 2115 ** 2006: Consolis II, Vivarte II, Médi-Partenaires Sources: advisors, Epsilon Finance, PEM (1)Not confirmed Sources: advisors, Epsilon Finance, PEM (1)Not confirmed II, Lafarge Roofing, Quick, Fraikin II. for M&A and legal advisors

(with Fabrice de la Morandière and tique Aforge for the M&A advisory in value) in France, often advised, on year). A little bit like Morgan Stanley Michel Frieh who is leaving), Latham business. Close Brothers is back on legal aspects, by Freshfields, Ashurst, and BNP Paribas in M&A, still large- & Watkins (with Thomas Forsch- the lead and Lazard remains regular Latham & Watkins, Mayer Brown, ly dominated by the Rothschild team bach) or White & Case, Clifford contestant fot the top 5… Linklaters or White & Case. Bredin led by Laurent Baril and Richard Thil. Chance, Mayer Brown, Ayache Sala- Finally, the large LBO market si still Prat is involved in a very few private Goldman Sachs, Lazard and JP ma & Associés… remain key advisers! the easiest to rank with only a dozen equity deals, but always the largest Morgan completed the podium last So are Rothschild & Cie and the bou- of very large deals (more than 1 Bn€ (PagesJaunes, TDF and Europcar last year. ■ Fabrice Anselmi FOR BANKERS 50-500 M€ enterprise value >500 M€ enterprise value LAW FIRM DEALS NBR. AMOUNT QUALITY LAW FIRM DEALS NBR. AMOUNT QUALITY AND MANAGERS 1 SJ Berwin 17 2808 ** 1 Freshfields 7 7297 * egal specialists such as Eric Cartier Millon (from Gide Loyrette Nouel) 2 Linklaters 15 2602 *** 2 Ashurst 6 5167 ** L advise debt and mezzanine pro- 3 Latham & Watkins 14 2933 *** 3 Latham & Watkins 5 9643 *** viders which are, nowadays, keystones to a LBO transaction. He advised 29 LBOs 4 White & Case 11 1911 * 4 Mayer, Brown, Rowe & Maw5 7280 * or recaps in 2006! The teams led by 5 Lovells 9 1384 * 5 Linklaters 5 3560 *** Laurent Mabilat at Ashurst (14 deals), 6 E&Y LF (1) 9 1100 - 6 White & Case 4 6233 ** Xavier Farde at Latham (13), Colin Millar at SJ Berwin (11) or Arnaud Fromion 7 Clifford Chance 8 2122 * 7 Allen & Overy 4 3865 - at Linklaters (10) are also well valued 8 JeantetAssociés 8 1273 - 8 Bredin Prat 3 12100 - by bankers and mezzanine houses. 9 Mayer, Brown, Rowe & Maw8 1218 * 9 Gide Loyrette Nouel 3 9100 - SJ Berwin is a stand-alone leader on the market of structruring funds (16 last 10 Ayache Salama & Associés 7 999 ** 10 Cleary Gottlieb 3 6900 ** year), while Landwell is number 1 11 Taylor Wessing 7 415 - 11 Debevoise & Plimpton 3 6580 - advisor for taxation. On the specific 12 HPML (1) 7 800 - 12 Sullivan & Cromwell 3 5450 - business of advising managers of the target companies – a French “specialty” 13 Ashurst 6 1391 ** 13 Franklin 3 3480 * as they have gained a strong decision 14 De Pardieu Brocas Maffei 6 393 * 14 Willkie Farr & Gallagher 3 3410 ** power – Mayer Brown, Sarrau Thomas 15 CMS Bureau Francis Lefebvre5 855 - 15 Fried Frank 3 1500 ** Couderc and Wilinski Scotto are leaders for legal. Callisto recently invented the Sources: LF, PEM (1) Not confirmed (2) Based on public deals Sources: LF, PEM (1) Not confirmed (2) Based on public deals job of advising M&A management…

June 2007 | Special Issue | PRIVATE EQUITY MAGAZINE 17 018-018comment1 29/05/07 18:02 Page 18

A COMMENT

FRENCH LEGISLATION LBO debt: have recent legal changes made it a safer job? Matthieu de Varax, partner at Mayer Brown Rowe & Maw LLP,looks at how recent legal changes may affect the financing of private equity funds in France.

imply put, to the extent that private Debtor in possession formality of having the pledge notified equity transactions essentially rely on One of the main hurdles of taking security upon the debtor by process server. Equally, S leveraged financing, which financ- in France has always been the requirement the pledge no longer needs to be registered ing requires taking security on all available as- that the secured asset be removed from the with the local tax office which, incidentally, sets (financial assistance rules permitting) of borrower’s possession (a concept known as allows French receivable pledge agreements the borrower(s), much of the legal landscape dépossession). to be executed in English. of French private equity has been somewhat Article 2337 of the Civil Code now pro- shaken up in the space of 11 months. vides that a security interest in movable as- Here comes the fiducie sets can be perfected upon its filing with a In common law jurisdictions, taking secu- Matthieu de Varax, partner at Mayer Brown Rowe & Maw. special public registry. Accordingly, creditors rity in syndicated lending transactions al- may now record a security interest in the most systematically means creating a trust, debtor’s movable assets (such as machinery, with the security trustee holding the secu- IT equipment and other goods) and those as- rity package for the benefit of the lenders. sets may remain in that debtor’s possession. This proves to be a convenient concept that, As a result, other creditors (such as subor- inter alia, simplifies syndication and allows dinated lenders) may take lower priority se- perfection of the security in the sole name curity interests in the same assets. Undoubt- of the security trustee. edly, this special registry will require some By contrast, French practitioners have further legislation to take account of practi- been debating for years about the best way to cal considerations that have not been taken take security on behalf of a syndicate of on board by the Ordinance. For instance, lenders. The issue can become complex where commercial courts tend to require that se- the security has to be registered (as is now the curity documents be executed in French in case for pledges of movables, as seen above): order to be filed, which may not be compat- should the security interest be registered in ible with certain cross border syndicated the name of all lenders to ensure perfection transactions. Similarly, the filing form that of each of their individual interests or can it has been created does not take account of the be filed only in the name of an agent? case where the security is held by an agent or The much awaited introduction of a trustee on behalf of a pool of lenders, etc. fiducie (the French equivalent of trust) in French law by the law of 19 February 2007 Putting the lender in the driving seat may bring practical solutions to this issue. Refreshed security and fiduciary Another innovative feature – and one which Indeed, the law provides that one or more already gives rise to much debate between settlers may transfer assets, rights or security interest are meant to join forces. borrowers and lenders - is the secured par- to a fiduciary agent (or trustee) who will hold ty's ability now to foreclose on the underly- the same for the benefit of designated ben- The question is not if fiduciary interest ing asset immediately upon default of the eficiaries. Interestingly (and rather surpris- will be used in large LBO transactions, debtor, without the need for any previous ingly), the ability for a fiduciary agent to reg- court order. ister, manage and enforce security for and but rather when.” The Ordinance provides that the value on behalf of secured creditors is found at the of the secured asset should be determined very end of the law in the "miscellaneous" Olivier Héraut by an expert to ensure that the creditor provision (new article 2328-1 of the Civil However good a reading it could be, the does not collect more than it needs from the code), as if it was added to the text just be- French civil code never really made credi- asset. Any balance must be returned to the fore it went to the printer! Whilst the draft- tors' life easy. For a long time, French law borrower. However, this provision raises ing of the provision could have been bet- on security interests was perceived to – and questions such as when should the valua- ter, it makes no doubt that it was designed did – lack flexibility and transparency, and tion take place? Does title transfer immedi- to allow a security interest to be held by a fi- to an extent compared poorly with common ately upon enforcement? Can a non finan- duciary agent for the benefit of secured par- law instruments. Ordinance no. 2006-346, cial default trigger the enforcement? etc. ties. Refreshed security and fiduciary in- dated 23 March 2006, aimed at solving most Taking security interests in receivables terest are meant to join forces. The question of these issues and significantly reformed has also been largely simplified. Lenders is not if fiduciary interest will be used in large French law on security interests.. can now dispense with the cumbersome LBO transactions, but rather when. ■ 18 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | ” PUBS 29/05/07 15:35 Page 3 020-020comment2PA 29/05/07 11:00 Page 20

A COMMENT

EUROPE France, a favourable environment for private equity Marie-Annick Peninon-Bernard, consultant for European venture capital association (EVCA), explains how the French environment for private equity has improved during the last years.

lthough private equity took longer Crédit d’Impôt Recherche, which provides fis- to develop in France than in the US cal incentives for business R&D expenditures. A or UK, it’s now clear that the French This new fiscal initiative is another example of have caught up. According to a study re- the political will in France to reform and im- cently conducted by EVCA (“Benchmark- prove the environment for private equity fund- ing European Tax and Legal Environ- ing of companies. The creation of the Agence ments” – EVCA December 2006), France pour l’Innovation Industrielle and the “pôles ranks second only to Ireland – and before de compétitivité” are other ways in which the UK, where private equity first took off. France is helping boost innovation. This third pan-European study conducted Secondly, in terms of fund structures, with KPMG and including data up to July France offers a number of investment vehi- 1, 2006, reviewed 29 variables in three areas: cles – including the FCPR (Fonds Com- the tax and legal environment for limited muns de Placement à Risque), FCPI (Fonds partners and fund managers, the environ- Communs de Placement pour l’Innova- ment for investee companies, and the envi- tion) – that attract capital from domestic ronment for retaining talent in investee com- investors and non-domestic investors alike. panies and management funds. The study Pension funds and insurance companies en- show that France has improved its overall joy considerable freedom to invest within environment once again, just as it did in the the ordinary rules of caution defined by the According to 2004 study. European Pension Fund Directive. It is Marie-Annick What is the explanation for France’s ex- regrettable that France has not yet com- Peninon-Bernard, cellent performance? Part of the answer lies pletely adopted this directive into its regu- consultant for Evca, in the methodology used in this third bench- latory scheme. France makes up marking study. Although certain criteria re- for lost time. main unchanged, the recent evolution of Personal income taxes

DR market conditions and more aggressive poli- There is one area in which France fall short. cies at the European as well as national lev- At 48% the maximum personal income tax els mean that this year new analysis criteria is considerably above the European aver- ”In the environment study, were selected that favored France – espe- age of 42%. Furthermore, capital gains are France ranks second only to Ireland cially those promoting research and devel- taxed at 27%, including social charges, opment among investee companies. This is compared with a European average of – and before the UK, where private an area in which France has taken the lead 15%. This is a problem in terms of attract- in Europe, especially with the introduction ing fund managers or corporate talent. equity first took off.” in 2004 of a specific scheme for supporting However, recent fiscal developments are the creation and growth of innovative high encouraging, notably the fact that stock op- CURRENT SITUATION FOR PRIVATE EQUITY IN FRANCE potential start-ups (young innovative com- tions of investee company managers and pany, or jeune entreprise innovante – JEI). employees are taxed only when the under- Overall Pension Insurance Fund Tax Company Fiscal R&D Retaining As part of the scheme, SMEs fulfilling cer- lying shares are sold and “” average funds companies structures incentives incen- incentives talent for country tivization tain requirements in R&D spending benefit is taxed as a capital gain. We can expect to 0 from lower company tax rates for eight years. see other improvements in the area of tax- ation of capital-gains. 1 Interest for innovation The EVCA study is a comparative guide The JEI scheme was hailed in France as a great for governments to use in improving their 2 advance that should be adopted at the Euro- individual private equity environments and pean level. However, the fiscal advantages it to fight against fragmentation of the Eu- 3 provides shouldn’t hide the fact that, at 33%, ropean markets. EVCA supports the Euro- France : overall average France : score per criterion the company tax rate in France remains above pean Commission’s decision not to regulate European average 2006 the European average of 26.2% – even if the the industry, but to show best practices. The study is available on the EVCA website : www.evca.com Source : Evca study underscores the progress made with the In this regard, France is well placed. ■ 20 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | ” PUBS 29/05/07 15:35 Page 2

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European Private Equity and Venture Capital Association Minervastraat 4, B-1930 Zaventem, Belgium Tel: + 32 2 715 00 20 Fax: + 32 2 725 07 04 E-mail: [email protected] 022-023Lbo-social 29/05/07 11:06 Page 22

A BUYOUT : FOCUS t u o © Christian Roux NEW CHALLENGES y The social image u of private equity

b While the LBO remains the object of countless attacks, from unions but also politicians, the world

of private equity is preparing a social riposte. Beyond the value creation and employment points,

work still remains to be done on knowledge, image, transparency and sharing out of profit.

he French have to be reconciled of honour to display the social and economic is true that we didn’t see it coming, admits with enterprise”, you often hear in analysis of their activities by independent Javier Echarri, secretary general of EVCA d T economic circles. As for companies bodies, which is definitely favourable in cre- from his Brussels observation post. We took under LBO, the job seems so much harder. ating jobs (1 million since 2000 in Europe) too much time to understand what was hap- GPs are having their reputation blackened, and wealth. Professional investors thought pening.” For this Spaniard, the origins of managers get shown up for shameless self- they had good enough argument to aspire to “this organised campaign” dates from the enrichment and arrogance; so divorce is de- respectability. But a financial force of 600 bil- meetings between European and American e creed. Everybody who is not invited to the lion dollars, even during a period of abun- unions in Vienna last November to create a party, from employee representatives to dant liquidity, and a structuring effect on global organisation, the ITUC. At the time, bosses of CAC 40 companies, decide to get pretty much every sector of industry have in- the union representatives expressed their up on their high horse to denounce the in- evitably raised questions about the private worries about globalisation. The increased justices of a system which according to them nature of the operations. power of the hedge funds and private equity g benefits too few people. funds have been presented as two tools for Nevertheless, the profession no longer An unexpected mobilisation bringing financiarization of the economy. The needs to demonstrate the effectiveness of its In recent months, an unprecedented media debate continued during the economic fo- model; or have to claim a contribution to gen- campaign has portrayed these “barbarians”, rum at Davos. In March, the union consul-

a eral economic well-being which it consid- “birds of prey” or “grasshoppers”. Rating tative commission met in Paris and officially ers already established. For years, EVCA agencies and financial analysts have thrown asked the G8 for “a working group to study (European venture capital association) and themselves into the fray. Excited by the com- the dangers which the remarkable increase

r national organisations have made it a point plexity of operations, the weight of debt, new in leveraged investment poses to the inter- means for shareholding, the dynamism of national financial system”. In the European M&A markets and rumours of takeover, in- parliament, the socialist group has even or- creasing pressure had been weighing on pri- dered from the University of Potsdam a study vate equity. Finally, the unexpected union of a score of LBOs which conflicts with the

e mobilisation has spread internationally. “It existing independent studies… Over and above the figures and the case studies employed, the argument really takes an ideological turn. The profession is targeted in a political debate which is unconnected v “It is true that we didn’t see it with the growth in turnover or employees. Its image needs improving. In late 2006, Evca coming. We took too much time set up a working group about it; notably to to understand what was happening.” becoming more active in the press. It has ad- e vocated transparency, which is indispensa- Javier Echarri, secretary general of Evca ble for escape vilification. The critics have calmed a little… except in France, where the l

22 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 022-023Lbo-social 29/05/07 17:24 Page 23

Collectif LBO has not stopped demonstrat- ing since. Formerly attached to the CGT, led “All the employees must be associated to a second by a former manager from a company un- Lbo. And when it is not done straight away, this is dergoing LBO, Philippe Matzkowski, and supported by a union representative from above due to a shortage of time.” the Caisse des Dépôts, Philippe Larasse, at the start of April 2006 this organisation pub- Laurent Travers, chief financial licly displayed a document with an evocative title; “LBO: the recalcitrant ones”. “The in- officer of Scaff-Holding fection is spreading’ is the title of one of its latest press releases. In France, more than 500,000 people are suffering from this dis- ease with Anglo-Saxon origins called LBO…” Contacting the press, the public au- Perhaps it could be managed internally. But thorities, the elected members, even the Pres- funds now require their managers to take ident of the Republic himself (the Collectif some of the responsibility for this image prob- DR having been received by an advisor at the lem. “Which is logical enough”, as commu- Elysée), the movement proposes its own def- nication professionals like Charles Fleming, inition of an LBO: “A financial arrangement president of AMO Paris (EuroRSCG group) LBO’S IMPACT ON EMPLOYEMENT ACCORDING TO AFIC which pressurises the purchased company to explain: “an investment fund does not have refund the debt as quickly as possible…” an image, for the most part it works by mys- Constantin & Ass. published in Februray 250 000 A year after it was launched, the results terious processes. It needs to be person- a study commissioned by the AFIC: 200 238 000 French companies under LBO created 224 000 are mixed. With some successful agitations, alised.” Where a few months ago, managers 215 000 such as blocking deliveries when the sub- undergoing Lbo were required to agree about 35,000 new jobs for the last three years sidiary of Arena swimsuits in the Gironde, creating value, they are now requested to con- (+3,2% by year against +0,6% for the under a secondary buyout from the Italian BS tribute their experience about organising the national average), mainly in services. 2002 2003 2004 2005 Private Equity fund, announced its delocal- sharing out of value within the group. isation at the start of the year. In several groups, such as Terreal or more recently Vi- The need for dialogue rive from the complexity of the packages. In varte, the organisation of a new buyout op- “We are pressing for participations to be offe- carve-outs or spin-offs from major groups, eration precipitated a social movement, which red regularly to employees, within the lim- the employees are already used to own its of 25% of their remuneration and with shares from thier compnay… But in a small a lump sum”, recalls Patrick Sayer, the pres- firm, often everything still has to be set up PHILIPPE MATZKOWSKI, ident of the AFIC. “And we recommend that from the beginning. “And when it is not the rebel everybody should be involved.” Going fur- done straight away, this is above due to a ther, Gonzague de Blignières, the president shortage of time”, explains Laurent Travers, of Barclays PE, says “You’ve got to be more the financial director of Scaff-Holding, a spe- The Collectif LBO admired for what you distribute than for cialist in renting out scaffolding and props defines leveraged “Investing in a private buyout as “a what you make.” “In one sense, the market company is not a right, (with a 100 million euros turnover in 2006). financial is more mature, but in another, the social and but requires a minimum This group was acquired in 2002 by TCR arrangement which political context has changed. Even if you re- spirit.” Stéphane de through Suez, and has just been taken over pressurises the tain an option of a coherent group of share- Lassus, partner of Sarrau by its managers and bosses supported by purchased company holders with primary; on secondary you’ve Thomas Couderc. Barclays PE: the managers have increased to refund the debt got to be more dispersed”, confirms Alexis their share of capital from less than 5% to… as quickly as Dargent, partner at Mayer Brown. 51%: The first LBO often gets the financial possible…” And so examples of this “extension” are mechanism understood… the second LBO DR increasing. With the distributor Frans Bon- proposes to associate the 550 employees dur- was calmed down by setting up a plan for homme, managed by Michel Pic, the num- ing the five coming months… The funds can worker shareholders. Spurred into action ber of employees associated with successive only be delighted to see the managers pass- by the Collectif LBO, CGT delegates from packages is going to increase to 90, 400 and ing more time helping employee participa- companies undergoing LBO show resistance, then 700, via the creation of an employees’ tion than negotiating their management as at TDF where they took on the president company negotiated with the AMF (French package… And all this helps improve the ■

at recent company board meeting. The sale regulator). With Keolis, Terreal, Consolis, DR image of the profession. Marie Guilhem of the measurements division of Trescal by Materis, Ceva Santé Animale, Geoxia, etc. the Air Liquide group set off strong reactions the setting up of ever increasing circles of par- in the CGT delegation, which “decided to ticipants is just as evident. Of course, there Major novelties in profit-sharing put an end to practices of unscrupulous fin- are always some doubters. Some, like Sté- anciers”. At Vénissieux, the managers and phane de Lassus, barrister linked with Sar- and shareholding for employees employees of the Transmission & Distribu- rau Thomas Couderc, prefers to evoke the There are two new phenomena in the French LBO world, explains Bruno Fourage tion division of the nuclear group Areva even continued complexity of financial packages from Mercer HRC.The 30 December 2006 law for the development of employee had the last word in the transfer of their site and above all the risk which financial in- participation and shareholding has made the system for collective remuneration by their shareholder. They carried off the vestment in an LBO operation constitutes considerably more flexible, by permitting the enterprise to pay an a posteriori profit stake against the turnaround fund Green Re- for an ordinary employee. “Investing in a pri- sharing supplement of up to 20% of the total salaries bill which is tax free. Previously, covery. French private equity must henceforth vate company is not a right, but requires a it had to be decided before knowing what the profit would be.This law has also set get used to its inconvenient partners… minimum of entrepreneurial spirit and af- up a collective mechanism for distributing free shares, which may or may not, accor- “In effect, I can sense real union pres- fectio societatis. You must distinguish be- ding to the employees’ wishes, be part of a company savings plan.This change sure”, observes Xavier du Boÿs, CEO of Kilo- tween priorities for shareholders and for em- should facilitate the establishment of mechanisms for medium term incentives over utou, “but it not necessarily linked to LBOs. ployee savings.” What others present as four years, exactly the right period of a LBO; and increase the circle of beneficiaries. It has more to do with setting up the project.” reluctance to share out the cake may also de-

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 23 024-025cap-dev 29/05/07 11:12 Page 24

A EXPANSION CAPITAL

Pierre-Michel Passy,Antoine le Bourgeois and Pierre-Yves Poirier,partners of Edmond de Rothschild Investment Partners (EdRIP), raised 170 million euros in 2006. l a t i p a

TRADITION © Olivier Héraut c

How to live in the shadow of the LBO? n Why pursue expansion capital when you can make more with a leverage operation? Sustaining growth in the company, maintaining control over it, getting used to partnership with a financier,

o are the answers for managers. Diversification is the one for the LPs.

i etting off in the capital-develop- pansion capital which drives the market eco-system which would be favourable to ment shuttle for a trip into the pri- with 1.5 times as many operations as the them, admits Jean-Jacques Vaury, associate S vate equity galaxy will end up, Lbo. Does the comparison stop there? The director of UI Gestion, which has invested eventually on planet LBO. This might be, capital invested in them is 6 times smaller 30 million euros in 6 investments in 2006. s in short, the offer made to directors of small than that destined to majority participations “Our commitment with companies, the and medium sized enterprises who are which have, nevertheless, known an ad- length of our capital presence and the sta- timidly preparing to discover the universe vance of nearly 25% in 2006 thanks to big bility which it implies, the theme of the de- of capital investment. If they have decided operations like PagesJaunes or TDF. velopment of small and medium sized en-

n to resist the appeal of debt and the sirens But with the average ticket approach- terprises are all arguments which appeal to of buyout, but need to structure their cap- ing 10 million euros, expansion capital is institutional investors, pension or insurance ital or a major injection of funding, expan- losing its image as an “old style” invest- funds, confirm Pierre-Michel Passy and sion capital is made for them. This instant ment, which stuck to it during the 70s and Antoine le Bourgeois, respectively presi- version of private equity is also one of the 80s. And even so... The profession is hap- dent and associate director of Edmond de

a most dynamic in France, with fifty or so pily getting used to “nice investors”, who Rothschild Investment Partners (EdRIP), more or specialist funds with tickets vary- are rather discrete just when private equity the autonomous management company for ing from 100,000 euros for small regional is at the centre of polemics about sharing the LCF Rothschild group, whose last fund, teams to 50 millions for pan-European the creation of value or economic patriot- raised at the end of 2005, amounted to funds like 3i, specialising on the mid mar- ism. The expansion capital has become the 170 million euros.

p ket and the emerging countries. Nearly 450 moral security for the sector, for the good To list the advantages of expansion cap- French entrepreneurs have thus taken this pupils from the “private equity” class. ital does not necessarily amount to oppos- option last year. ing LBO. “We are a stage in the develop- Investments made in 2006 in expansion The best side of the profession ment of an enterprise. In 95% of the cases capital surpassed a billion euros. More than For expansion capital presents the best side we have known, it is the first capital open- x one enterprise in three concerned with cap- of the profession. The one which is inter- ing. The director is not familiar with debt. ital investment in recent months have done ested in small and medium sized enterprises And we are going to get him used to an en- so with an expansion capital fund. For the and domestic markets… “It is true that we vironment, familiarise him with the funda- French venture capital association (AFIC), are at the heart of the problem of the dy- mentals and growth logic which might lead

e the conclusion is obvious: it is indeed ex- namics of industry and the creation of an him to Lbo,” emphasises Christian d’Ar-

24 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 024-025cap-dev 29/05/07 17:26 Page 25

goubet, managing partner of EPF, which “We are a stage in the development of when created in 1996 aimed at providing “pre-flotation” financings in Europe. an enterprise. In 95% of the cases, it is The frontier between buyout and ex- pansion is all the same increasingly tenu- the first capital opening and the ous. “Reinforcement of their own funds, sale by minority shareholders, owner buy- manager is not familiar with debt.” outs, etc. the typology of operations has been greatly enlarged”, warns Benoît Mé- Christian d’Argoubet, EPF Partners tais, general director of Sigefi PE/Siparex. On the last fund raised at the start of 2006, Siparex made 50% of its activity in expan- sion capital. This variety of possible activ- which EPF had taken 20% in 2002 at its ity evoked by Benoît Métais offers the pro- squeeze out of the French Bourse. The in- fession an impressive deal-flow. Certainly dustrial company, specialised in ocular im- superior to that of buyouts, even if Pierre- plants which has since developed products Michel Passy’s team once asked whether for removing wrinkles, was then valued at it would have enough. EdRIP finally 22 million euros. achieved 10 dossiers for a sum of 60 mil- To obtain such profits, the rules are

lions invested in 2006. Expansion capital is simple: be a major shareholder, be part of DR

still not very intermediated. There are not DR the board of directors, and, or course, limit yet any Parisian merchant banks but a pop- EdRIP achieved in January the recourse to leverage. Performance has its growth project in place. And to make ulation of advisers who gravitate around the quotation of Eurilogic, to be found on growth projects. The en- itself attractive for an acquirer, this time heads of companies (business lawyers, ac- a company specialized in terprise is going to be forced to change size. a majority one… At Rothschild from 1990 countants, auditors) and transform them- electronic and computer “Our role goes beyond a minority one. We to 2005, on 48 investments and 38 exits, selves into business contributors in nearly services for industry (here do the same work as LBO teams. We must a third were by IPO, a third by corporate 50% of dossiers. The rest comes direct… naval intelligence). be active and inventive. We get involved in exits and a third by LBO. This distribution the business plan, and help to structure the fairly faithfully reflects the profession as Performances are better than assumed financial information”, confirms Eric Pen- a whole. Rothschild in January achieved As far as performance is concerned, ex- creac’h, who is in charge of expansion cap- the quotation of Eurilogic, a company spe- pansion capital might suffer in comparison ital activity and buyout at Crédit Agricole cialized in electronic and computer serv- with LBO… “We are doing far better than Private Equity. ices for industry, which increased from 20 the statistics which credit us with an aver- The debate is open between expansion to 60 million euros turnover between 2002 age IRR of 17%. Our profits are nearer capital specialists, for whom LBO permits and 2006 thanks to external growth. This to 25 than 20%, and may be spread over the buying of much more sophisticated as- summer, EPF was able to put 17,5% of the seven or eight years”, categorically assert sets but does not have growth as a priority, capital of Parrot, specialist in bluetooth the funds concerned. This is the Rothschild and buyout specialists like Jean Eichenlaub, telephone for cars, on the market, with case for 38 analysed exits, with in general of European Capital, who assert that 81 million euros turnover. But none of the 5% of the IRR linked to under-rating on growth is also written into their business participants neglected secondary opera- entry (20% for minority positions), and the plans. For Pierre-Michel Passy, an expan- tions, particularly recommended for op- rest for the growth of the enterprise or the sion capital operation is above all an asso- timising their contributions. The LBO is improvement of its profit margins. ciation and not a purchase. Because the also often the choice of the manager who, Of course, some operations have been fund remains in the minority; because it is at first, had opted for expansion capital to able to shoot off the end of the scale. more dependent on the manager of the remain in the majority and to emphasise Banque de Vizille, with 450 million euros company as well. the contribution of capital over debt. “We of equity capital, with 60% invested in ex- “We have not got the power to choose put him on the way to improved perform- pansion, evoke Distriborg, transferred in the management, that makes its position ance, and help him structure his teams and 2000 with an IRR of 17% over thirteen much more dominant”, adds Christophe to make the best of his financial structure”, years. In 2006, the lovely operation is to the Tournier, management member of CIC insists Christian d’Argoubet. credit of EPF, who signed with Cornéal an Banque de Vizille. This difference has its In practice, the growing role of OBOs industrial American exit. The cosmetic cost. The multiple will be different and will proves that the founder-managers look more medicine giant Allergan payed out 170 mil- permit LBO to sell better. and more kindly upon the buy-out. These lion dollars for the small Annecy group in owner-buyouts let the manager introduce Two time development a minority shareholder and bring out some In theory, expansion capital assumes an ef- cash. Ready to repeat the operation, this time fect over two periods. The company will with a majority shareholder, a few years later. undergo a fast acceleration for five years. It Today we do almost as many Obos as ex- will not have optimised the operation be- pansion capital, admit Jean-Jacques Vaury ing paid with large multiples, but its asso- and Benoît Métais. The result: a more rapid ciation with the funds will permit it to put circulation of expansion capital operations whose length, for a fund like Siparex, now passes below the five year limit. “Helping a manager to do a cash-out is not what we “Capital expansion still like best”, comments Eric Pencreac’h. “It corresponds less with our expansion capital represents our core business philosophy”. But at the same time, average with 40% of our investments.” tickets are regularly increasing from 2 to 5 million francs ten years ago to 5 to 6 million Guy Zarzavatdjian, managing partner of 3i Europe euros today… ■ Marie Guilhem DR

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 25 026-027venture 29/05/07 11:18 Page 26

A VENTURE

Bernard-Louis Roques (Truffle Venture) and Viviane Redding (European Commission), have views on long term investment in technology. l a t i DR p ABOUT THE EXIT

a New IPOs are c

regaining momentum at “the Bourse”… e Venture exits seem to be back.The true dynamism of the stock markets has opened up the hori-

r zons for French VCs in 2006.The profession is rediscovering the delights of new IPOs after a long gap, notably for biotech.The momentum effect might well re-launch the entire sector…

u t first sight, it seems like a long Capital inflow or medium-sized enterprise” must not un- time since venture capital in A massive inflow of capital into innovative dergo the same discrete development as the A France has been showing so much enterprises would be like changing gear. FCPI(1), which “nowadays finances much dynamism. According to the Chausson Fi- This is Philippe Pouletty’s thesis, the gen- more than just innovation, as the huge ma- t nance indicator, the second half year of eral partner of Truffle Venture and hon- jority of companies concerned already have 2006, with 441 million euros invested in orary president of France Biotech. Ac- a turnover of more than 1 million euros”, start-ups in France, has been the best since cording to him, the solution lies in “a emphasises an official of the Oseo-Anvar 2000 and the bubble bursting. The year reorientation of the French people’s sav- innovation agency. 2006 will certainly be remembered as a very ings habits, particularly from 1,400 billion n good one, with 811 million euros injected euros in life assurance to small and medium The market supporting the funds into 550 companies by the 53 venture funds sized enterprises and seed capital, still lack- But does bringing in more capital really active in France. This amounts to a histor- ing in France”. The situation might im- solve everything? The problem of the size ical investment record of 1.6 million euros. prove a little with the launch of the France of venture also reappears when you see the

e The first false note is, however, that the Investissement mechanism, held by the new exits, notably on the Paris Bourse. And gap between the total sums raised in all in- Caisse des dépôts on behalf of the State. it is framed in almost ideological terms; the vestment capital and risk capital remains “The prospect of the State participating left shock waves from the bubble bursting have so large; 8 billion annually against 800 mil- me sceptical at the start, admitted Denis passed, the situation is improving, but in lion. The difference is about one in ten and Lucquin, the managing partner at terms of critical mass, the French market v is tending to get bigger. Furthermore, the Sofinnova, but I have changed my mind. still leaves something to be desired. There dynamism of venture in France depends France Investissement will work with the is no shortage of positive signals. So al- very largely on a reduced group of risk-cap- fund of funds, which seems sensible to me.” though practically all plans for floatation ital investors, the 10 leading funds The minister in charge of small and have been frozen since 1999 in the health (Sofinnova Partners, OTC Innovation, medium-sized companies, Renaud Dutreil, sector (which attracts a third of VC invest- Turenne Capital, Truffle Venture, ACE has announced up to 3 billion euros to be ments, biotech and medical supplies to- Management, Crédit Agricole PE, Innova- injected into growth companies over six gether), recent quarters have seen the IPOs com, Seventure, Auriga, Innoven, etc.) years. Which is quite a lot. Once again the of Bioalliance and Exonhit Therapeutics making up half the investment. In short, the funds have got to be present where prom- (1) Venture investment funds subscribed Paris exchange is still too small. ised, but also the notion of “growth small by individuals who benefit from tax exemption.

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(late 2005), then Cellectis, Genfit and In- nate Pharma in late 2006 and early 2007 on “A start-up should not the market. The enterprise METabolic EX- to public without a 15 million turnover.” plorer has just been listed, confirming this trend. Marc Fournier, partner of Sgam AI Private Equity The same thing could be said, nearly, for telecommunications, software and In- ternet. If the IPOs have never completely stopped, they have been rising again since the first round of financing. “An in-depth 2005 with Meetic, Rue du Commerce, analysis shows that “trade sell” operations Maximiles, Meilleurtaux, Newsweb, Net- give a higher valuation to a company”, adds booster, Weborama, Xiring, Prodware, and Denis Lucquin, “the acquirer trusting to the more recently Neuf Cegetel (on Eurolist) strategic nature of a new technology or a or DreamNex… It remains although that market position. A choice has to be made at Alternext has only 60 members at the end certain times: favour the trade sell for a faster of 2006. And the year has been more gen- exit, possibly in “paper”, or to float the com- erally an excellent one for all the stock mar- pany, often at an lower valuation, but in the DR kets: Alternext, set up in 2005, has only hope of taking more advantage of strong been taking advantage of this dynamism. points later.” This is the way for Cellectis, would not have selected! At its present rate of development, it will introduced in February on Alternext, which For Marc Founier, a start-up should not need several decades to play in the same has subsequently benefited from its genome go public without a 15 million turnover: league as its explicit model, the Alternative engineering technology and rewriting of “The good IPO was Parrot’s”. The special- Investment Market, which already counts DNA sequences, an interesting model for ist in bluetooth technologies was floated nearly 1,500 quoted companies a decade several pharmacy, agro-chemical and bio- in June 2006 on Euronext, sustained by a after its creation on the London Stock Ex- production sectors. 2005 turnover of 80 million euros, up by change. “The fact of being quoted gives visibil- 140%, with a net profit of 7.7 million. The ity and credibility”, confirms Valéry Huot, price has progressed 50% in nine months. The European route managing director of CDC Entreprises In- André Choulika, CEO of “Certain candidates are not ready”, con- Cellectis, and Stéphane ”Alternext still has a narrow base, so let us novation while insisting on the need for re- firms Pierre-Louis Amancic, taking-up ad- Boissel, Innate think in European terms”, proposes Marc lated communication. For instance, Efront Pharma’s CFO. visor with the boutique Havila Partners by Fournier, a partner with Sgam AI Private (publisher of financial software) made its en- Two of the main French evoking the discussions with the AMF Equity. “And let us look to the United States, try on Alternext in December and raised IPOs in biotech during (French regulator). “Strategy and growth our point of reference. The difference is enough to buy the webholding part of Fy- the last months. rhythm count for as much as turnover”, cor- clearly in our favour. There were masis in March… rects Bernard-Louis Roques, a partner with 138 VC backed flotations of high technol- “The bad scenario, continues Philippe Truffle Venture, who talks about quickly ogy companies on the European Stock Ex- Pouletty, is where the stock market functions reaching capital of 100 million. Netbooster change during the last twenty-four months, badly and leaves the big groups to set the arrived on Alternext in July 2006 with an against 97 in the United States. Objectively prices.” There is still a long way to go. To the annual net increase in sales of 70% and the speaking, the markets are in a good state.” point that some people are even demanding objective of becoming the leading quoted Sgam AI PE is furthermore preparing whether the IPOs aren’t too easy, paradox- player in its sector [qualitative evaluation of 3 IPOs for IT companies. And Marc ically. Recovery is present in the Bourse, but visits to web sites]. And Dietswell, special- Fournier has just added that “industrial ex- Alternext remains a new market; a fragile DRist in petrol drilling which had failed its pri- DR its are just as dynamic. The big groups have market. The little cold snap in March re- vate placement in October, was successful reduced their R&D after the bubble burst minds us how volatile the indexes are. No- in its quotation in January, after a concerted and now find themselves short of new ideas. body has the temerity to think that their (per- communications effort around its economic They have their needs and often their fi- sonal) champions, even with growth based model. Truffle has anyway retained the es- nancial means.” This analysis was shared by on sound fundamentals, would be spared in sential part of its participation and wishes Philippe Pouletty. “The industrial and tech- the event of the Bourse going the other way. to build a group for the long term. nological fundamentals plead in favour of “The course of the first ones must not dis- The funds have a role to play “up to 50 venture for the medium term.” courage the others”, notes Philippe Pouletty. or 100 million euros turnover” according The market thus may reasonably rely on VCs under lock-up feel themselves at the to Pierre-Louis Amancic. “The idea is to the momentun coming from easier exits. In- mercy of a market full of companies they follow them up until compartment C on cluding floatations? “Yes”, Denis Lucquin Euronext, which should coincide with our replies without hesitation. “The IPO re- exit”, suggests Valéry Huot, according to mains the sole means for building European whom “it is no longer possible to enter the or global champions. Nicox is now worth market as contraband on the basis of an 10 times more than at its floatation in 1999.” economic model drawn up schematically. “For bio-therapeutic companies with no The analysts are on the look out, it will be products on the market yet, adds however a failure”. ■ Erwan Seznec Stéphane Boissel, CFO of Innate Pharma, the valuation reflects essentially medicines at phases II and III, that is to say those which are not far from being authorised to be put “The industrial and technological fundamentals on the market. Everything which is further upstream in development has hardly any in- are in favour of venture for the medium term.” fluence on the quoted price.” Innate Pharma (cancer immunotherapy) was launched on Philippe Pouletty, general partner of Truffle Venture Eurolist in November 2006, with the un- and honorary president of France Biotech.

limited support of Sofinnova, present since DR

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 27 028-029strategy 29/05/07 11:22 Page 28

A STRATEGY

PORTFOLIO ADDRESS IDENTITY Having decided to set up a LBO group, La Compagnie Financière de Rothschild Edmond de Rothschild had recourse to two former Astorg Partners employees who raised a team and set Capital Partners : up their first funds in October 2004. Edmond de Rothschild Capital Partners so far 47, rue du Faubourg Saint Honoré boast of 7 investments, 4 of which were realised in 2005. 75401 Paris Cedex 08 Taking a position on enterprises worth from 30 to 200 million euros, the fund aims for the active growth of its participations, principally by roll-out and/or Tel : 33 1 40 17 21 69 Fax : 33 1 40 17 23 91 buy-and-build. It should launch ERCP II in the course of 2007 with the objective Web : www.edrcp.com of raising 300 million euros. Email : [email protected] Edmond de Rothschild Capital growth accelerators With a clear Lbo strategy of growth by roll-out and/or buy-and-build, the Edmond de Rothschild Capital Partners has been able, quite apart from its name, very rapidly to build a reputation in the small world of the French mid market.

he profession includes a few fa- nancière Edmond de Rothschild, which he schild. They have the market segment of mous double acts. The one formed heads, in private equity. The house is active companies worth from 30 to 200 million T by Erick Fouque, 45, and Eric de in institutional and private management euros in their sights. Rather than a semi- Montgolfier, 41, is one of them. “We are and already has an expansion capital and captive, it is a completely autonomous sub- one of those quadras who already have venture capability. It seeks to create aa sidiary structure named Edmond de Roth- twenty years of private equity experience LBO capability to complete its armoury schild Capital Partners (ERCP). Its behind them”, they recall. The two part- and take advantage of possible synergies prestigious sponsor is providing 30 million ners met at the start of 1990 at Astorg’s, in raising funds, deal-making and estate euros towards the aim of raising funds of in the final days of the old joint-venture be- management. 200 million. tween Idi and the Suez group. They con- The new team starts its activities in sep- tributed to Astorg I’s track record, and then An entrepreneurial opportunity tember 2002. The timing could hardly be took charge as co-founders of Astorg II, An entrepreneurial opportunity you can- worse. “It was the worst period”, the in- from 1998 until 2002. not refuse. From a single blank sheet of vestors recall. They closed the funds in Oc- Michel Cicurel was then seeking to re- paper, the “2 Erics” are building a mid mar- tober 2004 at 210 million euros. At that inforce the presence of La Compagnie Fi- ket Lbo strategy for Edmond de Roth- date, ERCP already had 2 investments to DEALS ■ Via Location ■ Médiascience ■ H3S ■ Lavance ■ Acteon ■ Bonpoint A pre-emptive offer ERCP enters as majority The founder of the French The French leader in car The leader in small scale The funds first investment allowed ERCP to win the shareholder for the leader number 2 in the wash distribution equipment and dental dis- made in September deal in January 2004. The of science teaching specialised free press and maintenance was posables has achieved 2003, a luxury brand second most important equipment in France in chose to structure an OBO sold in July 2005 to ERCP. 2 acquisitions since July children illustrates the multi-specialist industrial February 2005. with ERCP in April 2005. It then had a turnover of 2006, in Germany and Italy. roll-out strategy shown vehicle-hire group in At the time, Médiascience Today it can boast of 35 million euros and was Its current growth should by some of ERCP’s partic- France has change its boasts 41 million euros doubling its Ebit and of responsible for 4,500 sites. allow it to enter the world ipations. Expanding by a “mix” of activities to sales and a rich catalogue a fast acceleration of its The group strategy is to top 10 within five years. dozen openings a year in concentrate on the core of 8,000 references. growth thanks to the redirect its core business A scenario which has won France and abroad, Bon- business of long term Today, the company creations of new editions from a trading model over ERCP. point expects to surpass rentals and maintenance. is aiming for a turnover in France and abroad, to a services model with Management has further- 50 million euros sales in It has created a nearly close to 50 million, notably the acquisition contracted B-to-B. more persuaded sharehold- 2007, growth superior to 70% Ebit increase in three basing its development of a competitive title er to retain his capital until 15% a year since 2003. years. And permits, at the increasingly on the in the Paris region and of the end of 2010 The exit, in February, exit in March, a return near international market. the French-Swiss leader to provide time to put this returns more than of 3 times the investment. in the sector. strategy into effect. 3 times the investment.

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KEY WORDS ■ PRESTIGIOUS NAME ■ INTEGRITY AND LOYALTY ■ ENTERPRISE CULTURE ■ MANAGER FRIENDLY ■ STRATEGIC VISION ■ ROLL-OUT AND BUY-AND-BUILD Partners : DR PARTNERS >>> ERIC DE MONTGOLFIER ERICK FOUQUE Co-founding partner of Edmond de Rothschild Co-founding partner of Edmond de Rothschild Capital Partners in 2002. Eric de Montgolfier has Capital Partners in 2002. Erick Fouque has twenty seventeen years experience of private equity in years in private equity in the French market. In the French market. From 1990, he first acted as 1986, he launched a start up in the cosmetics associate then senior associate at Astorg industry. From 1988, he spent ten years at Astorg Compagnie d’Investissements. Compagnie d’Investissements, where he was In 1998, he was one of the co-founders of successively as associate then senior associate. Astorg Partners, the management company In 1998, he was also one of the co-founders of for Astorg funds II, focused on leveraged build- Astorg Partners, the management company for 210 million ups in France. He is a graduate of ESCP. Astorg funds II. Erick is a graduate of HEC. [euros under management]

In three years, the team will have studied about 20 external growth target areas and will have achieved 7 acquisitions.

its credit: Bonpoint and Via Location. The its network, opening a dozen shops a year, up with the investment pace. The year 2006 funds built their team by stages: 3 seniors, illustrate what they mean by roll-out. As has been much less busy for the team, ■ Viadom coming from 3i, Chequers or Astorg, but for buy-and-build, they suggest looking at which is selective and has only signed 1 op- Viadom achieves also 3 juniors, with an experience in private Acteon. The Bordeaux industrial group eration, as against 4 in the previous year. a turnover of nearly equity, audit, M&A and mezzanine debt. intensifies its acquisitions to enter the “We have also made 2 reinvestments and 2 37 million euros in the “This is the right sized team for managing world wide top 10 manufacturers of small recapitalisations, adds Erick Fouque, and services sector for people the present funds, the partners remark. scale equipment and expendable dental we probably won’t go beyond 10 to 11 op- at home. ERCP is organised around flexible deal products. erations for the present fund.” The syner- ERCP anticipates the teams of 3 people capable of concentrating “We have already achieved in a year 2 gies with the other arms of the Compagnie group, which began with on growth accompaniment and accelera- external growth operations each needing Financière have been functioning as well. home hairdressing, will tion, which is the heart of our strategy.” reinvestment. This is the proof that acqui- Private banking and the colleagues in ex- become diversified into sitions under LBO debt can be made, all pansion capital have facilitated access to Roll-out and buy-and-build housework and the more so as there is no hesitation in rein- 2 of the 4 ERCP’s friendly deals. gardening, at the same On their blank sheet, Erick Fouque and vesting”, explain the investors. In total, ex- The team, whose portfolio is regularly time as geographical Eric de Montgolfier have in effect in- plains Eric de Montgolfier, “the team and sought out by corporate groups, has already expansion to cover all scribed roll-out and buy-and-build as priv- the management of portfolio companies secured its 2 first exits, from Bonpoint and of France to create ileged tools of the pro-active growth they will in three years have studied about 20 ex- Via Location. The year 2007 in effect cor- a multi-service group advocate, especially in the four principal ternal growth target areas and will have responds to Edmond de Rothschild Capi- and the leader in terms activities where their track record was achieved 7 acquisitions”. tal Partners’ return on the fundraising road. of profitability. built: services, distribution, media and With also 7 participations in the port- The team expects raising a second fund of health. Bonpoint and the development of folio, the ERCP team estimates itself to be 300 million euros. ■ Marie Guilhem

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 29 030-031story1 29/05/07 11:30 Page 30

A THE STORY

Refocusing on wellness products, R&D, a new industrial base and acquisitions in the Southern Hemisphere… Diana Naturals has increased its sales by 26% in three years.

landmarks PET FOOD AND INGREDIENTS > 1954 Jean Guyomarc’h founds his enterprise specialising in animal Cognetas transforms food at Vannes (Morbihan) > 1990 takeover of the Diana Ingrédients Guyomarc’h group by Paribas > 1999 Transfer of the “amino acid” business, repositioning natural ingredients, consolidating refocusing on animal the pet food sector via investment, diversification of culinary ingredients… foods, ending animal raising and The company has found the right recipe with the first LBO conducted by Cognetas. slaughtering ; legal independence of Diana Ingredients f Diana Ingredients has advanced kets where it has acquired strong posi- understanding of the sector and the strat- > 2004 in ten years from a local SME tions, flavourings for pet food, amino acids egy needed: an understanding which is a Lbo by Cognetas I based in Brittany (small or for the pharmaceutical industry, also pro- precondition for the fund playing the role medium-sized enterprise) with a strong in- ducing natural extracts and culinary in- of “growth accelerator”. “Diana Ingredi- > 2005 dustrial culture to a major international gredients. Its internal growth rate reaches ents had to be reconstructed around ac- sale of BCF food sector group familiar with segmen- 10% with the encouragement of its prin- tivities linked to taste and nutrition, where > 2006 tation marketing techniques, it has some- cipal shareholder, the bank Paribas, which the company still seemed to possess a renovation of thing to do with Cognetas presence as manages its participation in the traditional strong potential for growth”, added production sites for shareholder. The company had started its way since taking over Guyomarc’h in Patrick Eisenchteter, the Cognetas part- natural extracts transformation earlier, but the results of 1990. But the merger with BNP in May ner in charge of this investment. So it was and construction of the former subsidiary of the animal food 2000 changed the situation: the new bank- logical that one of the first decisions was a highly efficient group Guyomarc’h are nevertheless pro- ing giant wants to unload the majority in- to sell activities outside the core business, protein production gressing in a spectacular way since its pur- dustrial participations inherited from such as the production of amino acids: unit in France chase by the fund in 2004: the turnover Paribas. Bretagne Chimie Fine is sold to Siparex advances from 161 to 254 million euros So in May 2004 it is Cognetas who and Céréa Mezzanine for 25.5 million in > 2007 between 2003 and 2006, with an Ebitda acquires 85% of Diana’s capital for July 2005. Acquisition of which increases on average by 19% a year 270 million euros, ahead of Axa Private Biofruit in Chile over the same period, with a marked in- Equity, Candover, Bain Capital and the Refocusing and repositioning (natural extracts), ternationalization (68% of turnover) in- two-headed ABN Amro-Barclays. Six The repositioning of Diana Naturals, the and construction dicated by the opening of business offices months studying the case and analyzing natural extracts division, is the second of the pet food in China, Thailand or Argentina. So what the results, and above all the intense dis- task: this means passing from a develop- ingredients factory were the “ingredients” of this success? cussions between the fund and the man- ment strategy on all fronts to a more tar- in the United States. In late 2003, Diana Ingredients is for agement led by Olivier Suquet have as- geted strategy. This subsidiary in fact com- sale: the company operates in niche mar- sured both parties that they have a similar mands a very wide product range for

30 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 030-031story1 29/05/07 11:31 Page 31

soups, sauces, drinks and pre-prepared 300 cats and 120 dogs regularly test the Diana Ingredients flavourings. subsidiary is also going to invest a sup- meals, made up from successive acquisi- plementary 8 million in the construction tions, the last of which in June 2004 was of a second production unit in the United- Villers, a subsidiary of Nestlé specialized States, which should become operational in dried fruit, vegetables and meat. But as in September. the market is becoming more segmented As if one were necessary, the final and more international, it suffered from a proof of Diana Ingredients’ transforma- lack of innovation and differentiation in tion is the diversification in the third most its products, and from outdated produc- important activity, culinary ingredients. tion facilities. As an answer to these chal- Very dependent on the bacon slices mar- lenges, Diana appoints at the head of its ket for the cooked meats industry, with subsidiary Antoine Coutant, formerly low profit margins, CAP Diana succeeds manager of a big international group. With in three years to enter the market for the help of Thomas Derville, the operat- cope with strongly increased demand, we sauces, and then the CAProteins, which ing partner of Cognetas, he is going to have opened new production facilities in are binding meat proteins for the meat in- reposition Diana Naturals in the very prof- Hungary and Mexico.” dustry, with 4 million euros investment in itable health and wellness sector. These investments are going to prove 2006 constructing a production site in The subsidiary is redoubling its re- Pleucadec (Morbihan). The impact of search and development efforts in this repositioning itself around these products area, bringing out products such as poly- “The operating partner both with large profit margins is clear: sales phenol apple extract with anti-oxidizing have progressed by 35% since 2003, from properties, which is used in basic foods helps creating value and transmits 22 to 30 million euros in 2006, and the and food supplements. At the same time, Ebit margin from 5.1 to 11.6%. the industrial base is being reorganised information between the fund and At the moment of assessment, when around 4 production sites, each concen- Cognetas considers selling its participa- trating on one specific product category: the management.” tion, both partners can boast of having extracts for baby food, seafood and meat reached their objectives a year ahead of extracts, vegetable extracts and niche the initial plan. Success which will lead products, and standardized extracts pro- profitable: having become uncontested Olivier Suquet and his management to duced in mass quantities. In 2006, the sub- world leader in a sector undergoing con- try the LBO adventure again despite be- sidiary puts a vast restructuring plan into centration and where the number two, ing reluctant about debts considered too effect, costing 6 million euros, and closes AFB International, just bought the num- high in the funds proposed financial pack- 2 units with inevitable social consequences ber three, NuPetra, SPF doubled its age. The takeover candidates are in- (52 of the 65 employees affected by the re- turnover between 2003 and 2006. This formed… ■ François de Soulanges structuring having been redeployed). Finally, to eliminate seasonal variation, Di- ana acquires a supply system in the South- ern Hemisphere, the Chilean company Olivier Suquet, manager of Diana Ingrédients, and Patrick Eisenchteter, Biofruit. Strengthened by this optimal sit- uation and the new production base, Di- Cognetas associate, recall their relationship during this Lbo. ana Naturals sees its sales grow strongly PRIVATE EQUITY : between 2003 and 2006 (+26%), to 89 How did your story start ? million euros, driven notably by its suc- Olivier Suquet : Jean Patrick Eisenchteter : cesses in the baby food and flavoured Ducroux and his team From the start we had drinks markets. came to visit us in a very good relation September 2003 for with Olivier and his R&D efforts for pet food the first time. During the team, which allowed The situation is rather different for pet following month, they us to agree on food ingredients, which represent 46% of were able to show us strategy in the event total activity when Cognetas bought Di- their real interest in our of our offer being ana: in spite of its firm position in Europe firm and in its specialized successful. and recognized know-how in developing market in particular… in With this leg up,

those critical appetizers in pet foods, the DR spite of a strange habit of DR we were allowed Pet Food Specialities department (SPF) turning the conversation to concentrate is confronted with a problem of capac- towards yachting, my favourite hobby. exclusively on the purchase process. ity in a market where demand must be PRIVATE EQUITY : treated on a global scale. At the same What has been Cognetas’s contribution since it started its participation ? time, the management is questioning the OS : We particularly appreciated Cognetas’s PE : At the very start of the deal, we were very long term future of the loss-making Amer- confidence in 2006 when they agreed to reinvest and deeply involved in the transfer of Bretagne ican production unit. “Nevertheless we raise the industrial base to the required norms, Chimie Fine. But late we also actively participated remained confident about growth and construct a new pet food factory in the United in researching possible acquisitions for prospects in the United States, with Eu- States, rather than insist on recapitalization. Diana Naturals. rope and Asia one of the three major mar- PRIVATE EQUITY : kets, explains Olivier Suquet. Thus we What has been the role of the operating partner of Cognetas ? have agreed with Cognetas to change this OS : Thomas Derville’s last experience with Unilever PE : The operating partner is not a spy for the fund: subsidiary’s management and to let it ben- Bestfoods, where he worked on the health and well- he both helps creating value and transmitting efit from its French equivalent’s know- ness position of their brands, was very useful to us as information between the two parties. We formed how for luring an animal of its food. Oth- part of our strategic thinking about the natural extracts a veritable trio with him and the management. erwise, to move closer to the clients and market. DOUBLE VISION

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 31 032-033story2 29/05/07 11:36 Page 32

A THE STORY

INTERNET SERVICES Newsweb, constructing a portal for men The VCs in the style of Alven Capital have just transferred this online information sites group for men to the Lagardère group.A real success in spite of “difficulties”.

999, the French team having just sportsmen – except Zidane – and signs who want to prepare the convergence of won the football world cup, Alexis about fifty contracts with most of the world web, television and cell phones – Jean 1 Caude returned from his experi- champions (Deschamps, Desailly, Barthez, d’Arthuys also joins the board of directors. ence in strategic management with Univer- Lebœuf, Lizarazu, etc.). In June, Athleteline “This management has always grabbed any sal Studios in the United States and decid- thus seals a first real financing round (of good opportunity for diversification and ed to copy an already existing 1 million euros) with Alven Capital, but also succeeded in uniting different professions”, business-model from across the Atlantic… BNP Paribas Développement, Capital- suggests Charles Letourneur from Alven “The Americans don’t know a lot about Invest (Aubay Technologies) and Qualis. It Capital, partner from the very beginning. “soccer”, but their sites about top sports- was not easy all the same, as the Internet In June 2002, the French football team men had just raised funds from famous crash is not far away and these sites do not makes a mess of its world cup and the cus- VCs: I thought about carrying off a financial achieve much turnover yet (neither in adver- tomer channels announce that they do not coup”, the entrepreneur admits… In tising nor in spin-offs or other signed photos want to renew their TV programmes: “At November, he signs a contact with the play- as in the United States…). this particular moment, we started again er Nicolas Anelka and launches Athlete- from zero, without any turnover”, the line.com, a publishing company for champi- Content production founding manager continues. It then learns on sites in association with the journalist Very quickly, the business becomes aware of about Sports.fr being in receivership. This Hugues Dangy (for content) and the finan- its own limits. Although the second financ- site was launched in France (with 15 mil- cier Cédric Baumer (for management). ing round seems complicated, in mid 2001, lion invested and completely lost) by the Boursier.com re-infor- Charles Letourneur and Guillaume Aubin, it diversifies in TV production on behalf of Sports.com group (CBS, Soros, Chase, etc.), ced the idea of a stra- the two founders of Alven Capital which the satellite channel range TPS Star and suffering from intense competition on a tegic move towards a will be born several months later, are asso- Infosport (notably with the programmes sports information market which was free group of sites target- ciated with “friends and family” capital. presented by Didier Deschamps and Marcel on line, and which targeted advertising ting the male audience. From 2000, the company takes over Desailly). The company opens its capital (up could not make profitable… The deal was from Canal+ the Internet rights of all its to 1.5 million euros extra) to M6 and Suez, settled for a mere 50,000 euros in 2002, and

32 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 032-033story2 29/05/07 11:37 Page 33

all the Athleteline.com shareholders return tion on Alternext at 10.65 euros a share. is given a mandate with Matthieu Pigasse to the kitty (about 300,000 euros), con- landmarks With similar professions and targets, it can and Andrea Bozzi, the respective contacts vinced that there are possibilities in pro- > 1999 bring together complementary advertisers. of Jean d’Arthuys and Charles Letourneur, ducing multimedia content. creation of The rest of the year is also going to be whose way in with the major media may In 2003, the company, renamed News- Athleteline.com, eventful with the launching of the commu- prove very useful considering the small ports, restructures the information site – the signature of a contract nity site football.fr (with chat, forums and size of the dossier. Three corporate groups number of journalists notably decreases with the football blogs), then autonews.fr. At the end of 2006, are set in mutual competition, a few Lbo from 24 to 11 –, and signs a contract with player Nicolas Anelka Wanadoo Sport, which should assure regu- lar revenue. With advertising taking off, it > 2000 breaks even in late 2003. The betting site buying up the “VCs have always been at our side in difficult Sport4Fun is also on sale. Because of the contracts of Canal+ moments: they are above all men who have French gambling legislation, the prizes sportsmen, 1st round of (from t-shirts to sports cars) are provided financing from the VCs there by the advertisers; therefore, this com- belief in other men… pany acquires considerable know-how in > 2001 direct marketing, permitting the generation launch of TV produc- the turnover reached 9 million euros, for funds try to get in on the act… On 12 of new traffic towards the Newsports sites. tion, opening the about 3 million Ebit. And the share price, December, Lagardère wins the game. The The transaction is more complicated than capital to M6 and Suez already rising strongly in the spring, has group, in the process of constructing a real the previous ones, and is carried out in > 2002 more than doubled to nearly 24 euros in “sport” division with the purchase of big “paper” in 2004, Sport4Fun becoming a purchase of Sports.fr spite of the turbulence in June… All the clubs, the rights manager Sportfive, and 100% subsidiary. The management imme- same, Newsweb stock is not very liquid for hence specialised media… on 15 Decem- diately optimises synergies, notably for tech- > 2003 the VCs, particularly as its value has not ber took over 75.2% of the capital at nical and administrative costs, with anoth- contract with been the object of a real public appeal for 24.70 euros a share – a bonus of about er little wave of departures to manage… Wanadoo Sport savings before deposing the reference doc- 10% –, and launched a purchase offer From 1.1 million turnover in 2003 (and loss- > 2004 ument in August. for the rest which values the company at es of 600,000 euros), the group reached purchase of Sport4Fun When the shareholders hear, during 74 million euros. For the Alven Capital a 2.7 million turnover in 2004 (with the summer 2006 the major French media funds, hence forward accustomed to 139,000 euros Ebitda). Since 2005, the > 2006 announce that they have missed the bus on two-figure multiples, that represents all whole structure draws the second biggest buying up Internet, an exit way emerges. And the the same more than 6 times the original Internet audience for sport in France Boursier.com and IPO management sense that it is time to think stake. “It is a cause for satisfaction to (behind lequipe.fr and ahead of Yahoo! on Alternext; sale of about an industrial transfer. The M&A have invested in only 3 managers and a Sport, Sport24.com, TF1 Eurosport, Foot- the whole ensemble to specialists network is re-launched, Lazard slideshow…” ■ Fabrice Anselmi ball365 or Sporever), and the biggest if Wanadoo Sport is included. 2006, key year Alexis Caude, president of Newsweb, recalls with Charles Letourneur At the same time, Laurent Jacob has devel- and Guillaume Aubin, partners of ’Alven Capital, this shared adventure. oped the Boursier.com site as a little Bour- sorama, of which he remains the sole share- PRIVATE EQUITY : holder and which has won its audience What conclusions are to be drawn from this successful partnership? thanks to a purchasable newsletter which is Alexis Caude: Charles recognised for its stock market recommen- VCs like Alven Capital Letourneur, dations. Above all, his principal competitor and BNP Paribas Guillaume Aubin: has meanwhile become an on-line broker Développement have On this opera- and has not been able to count on the flow always been at our side tion, we have of advertising from other financial interme- in difficult moments: always been diaries. This opportunity was quickly seized they are above all men very close to the by Laurent Jacob to improve his turnover who have belief management DR (2.2 million in 2004) and his profit margins DR in other men… and present on (0.7 million Ebit). At the end of 2005, he They remain close to the lines of investment and the board up to introduction: we left at that moment as wants to sell up and Alexis Caude hears do their work seriously, always asking the right we want to have the possibility to sell our shares if nec- about it through Jean-Charles Moulin, his questions, etc. essary (instead of which we have increased them). shareholder through BNP Paribas PRIVATE EQUITY : Développement… The idea of creating a But the story seemed ill fated… group of sites for men based on the model of AC : It was clear, almost from the start, that we had staked CL, GA : This operation was important for us, it was one auféminin.com takes shape. The transaction neither on the right industry nor the right project. But the of the first when we had created Alven Capital: we were may be made for 11 million euros; 8 in cash, VCs trusted us… They played a role at each turnaround, conscious of how this management was complementary 3 in paper. But the necessity to raise 6 million notably in sometimes bringing us opportunities for a new and it had furthermore never made any mistake in spite (more than 3 million debt) presents itself as a transaction. of the difficulties it had encountered. chance to float the group of sites: with a suc- PRIVATE EQUITY : cessful private pre-IPO, the operation is car- What of the future after this symbolic exit? ried out on 12 January 2006 for a market cap AC : Personally, I remain president of the direction of CL, GA : This sale to a major european press group marks of 30 million, of which 6 million euros are Newsweb with the willpower to stay at the heart of the an emblematic turn towards Internet and numerical new. It unites Newsports (3.1 million numeric strategy of the Lagardère group, who has just media; in spite of the recent doubts of certain media turnover and 0.45 Ebit in 2005) and Boursi- named Didier Quillot (ex-director of Orange France) at the about their capacity to appropriate Internet for them- er.com (2.9 millions turnover and 0.9 Ebit head of its “active media” division. With the JDD site and selves. in 2005) within Newsweb, before a floata- those of other magazines, there remains much to be done… DOUBLE VISION

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 33 034-034fundraisings 29/05/07 11:39 Page 34

Each month, a global view of the fundraising Fundraising tables market in Europe. Here In partnership with Access Capital Partners a selection for France.

TYPE GP FUND OBJECTIVES (M€) LOCATION

BUYOUT APAX PARTNERS APAX EUROPE VII 10000 WESTERN EUROPE BUYOUT PAI PARTNERS PAI EUROPE V 5000 WESTERN EUROPE BUYOUT INDUSTRI KAPITAL IK 2007 1250 WESTERN EUROPE BUYOUT ASTORG PARTNERS (*) ASTORG IV 800 FRANCE BUYOUT PRAGMA CAPITAL PRAGMA 2 300 FRANCE BUYOUT IPE IPE EXPANSION FUND 250 FRANCE BUYOUT QUARTUS GESTION QUARTUS CAPITAL II 200 FRANCE BUYOUT OCCAM CAPITAL OCCAM I 150 FRANCE BUYOUT SGAM AI PRIVATE EQUITY SGAM EASTERN EUROPE FUND 150 EASTERN EUROPE BUYOUT SGAM AI PRIVATE EQUITY SGAM NORTH AFRICA FUND KANTARA 150 NORTH AFRICA BUYOUT SIGEFI PRIVATE EQUITY SIPAREX MIDCAP II 150 FRANCE BUYOUT TCR CAPITAL PARTNERS TCR CAPITAL PARTNERS III 150 FRANCE BUYOUT ACLAND ACLAND III 100 FRANCE BUYOUT CÉRÉA GESTION (*) CÉRÉA LBO 100 FRANCE BUYOUT INDUSTRIE ET FINANCES PARTENAIRES INDUSTRIE ET FINANCES II 100 FRANCE MEZZANINE CAPZANINE CAPZANINE II 250 FRANCE MEZZANINE FINAMA PRIVATE EQUITY ACTO MEZZANINE 150 FRANCE MEZZANINE CÉRÉA GESTION CÉRÉA MEZZANINE 100 FRANCE VENTURE CDC IXIS INNOVATION CDC ENTREPRISES III 300 FRANCE VENTURE PARTECH INTERNATIONAL PARTECH INTERNATIONAL V 300 WESTERN EUROPE VENTURE CRÉDIT AGRICOLE PRIVATE EQUITY CACI 2 150 FRANCE VENTURE INNOVACOM INNOVACOM VI 150 FRANCE VENTURE TRUFFLE VENTURES TRUFFLE VENTURES PROGRAM II 150 WESTERN EUROPE VENTURE VENTECH VENTECH III 150 FRANCE VENTURE I-SOURCE I-SOURCE 3 110 FRANCE VENTURE 360° CAPITAL PARTNERS 360° CAPITAL PARTNERS 100 FRANCE VENTURE ALVEN CAPITAL ALVEN CAPITAL III 100 FRANCE VENTURE TURENNE CAPITAL PARTENAIRES TURENNE VENTURE CAPITAL FUND 100 FRANCE VENTURE CRÉDIT AGRICOLE PRIVATE EQUITY CAPENERGIE 80 FRANCE VENTURE ENTREPRENEUR VENTURE GESTION EENTREPRENEUR VENTURE 2 80 FRANCE VENTURE XANGE X PANSION 75 FRANCE FOF FINAMA PE QUARTILIUM III 350 WESTERN EUROPE FOF AGF PRIVATE EQUITY AGF PRIVATE EQUITY HOLDING EUROPE V 350 FRANCE FOF AXA PRIVATE EQUITY AXA PRIMARAY EUROPE IV 225 WESTERN EUROPE FOF ALTIUM CAPITAL GESTION MONTAIGNE CAPITAL 100 WESTERN EUROPE FOF UFG PRIVATE EQUITY / SCHRODERS DIADÈME GLOBAL SÉLECTION 100 GLOBAL BUYOUT FOF NATIXIS PRIVATE EQUITY DAHLIA 400 WESTERN EUROPE BUYOUT FOF AXA PRIVATE EQUITY AXA MIDCAP EUROPE 250 WESTERN EUROPE BUYOUT FOF OFI PRIVATE EQUITY OFI EUROPA I 100 WESTERN EUROPE SECOND. FOF AXA PRIVATE EQUITY AXA SECONDARY FUND IV 2050 WESTERN EUROPE Only funds who are actively searching LPs for an amount over 75 M€. Send us your information by email to : [email protected]

34 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | PUBS 29/05/07 15:34 Page 1 Each Month: Take the pulse of the French and European private equity scene THE MEN, THE FUNDS, THE IDEAS, THE DEALS…

TOUS LES MOIS • LE JOURNAL DES PROFESSIONNELS DU CAPITAL INVESTISSEMENT

o N 24 I Avril 2007 SPÉCIAL CLASSEMENTS For futher information, please contact us at : 2006

uLARGE CAPS Freshfields 00 33 1 40 33 71 93, by fax at 00 33 1 40 33 71 90 uVENTURE uSMALL CAPS uMID CAPS Bruckhaus Jones Day HPML SJ Berwin Deringer or by email : [email protected] DETTEu Gide Loyrette MANAGEMENTu STRUCTURATIONu FISCALu Nouel Mayer Brown SJ Berwin Landwell

uSMALL CAPS uVENTURE Lamartine uMID CAPS uLARGE CAPS Private Equity Magazine Orsay Conseil Linklaters Mayer Brown

VENTURE, SMALL, MID ET LARGE CAPS, DETTE, MANAGEMENTu MANAGEMENT, ETC. VOICI UN CLASSEMENT PAR Lipari Presse DETTEu Sarrau Thomas Ashurst Couderc CATÉGORIE DES JURISTES SPÉCIALISÉS.

MID CAPSu 100 bd de Sébastopol SJ Berwin uSMALL CAPS AVOCATS HPML PORTRAIT L’HISTOIRE STRATÉGIE ENQUÊTE : LE PRIVATE EQUITY 75003 Paris GRÉGOIRE SENTILHES DIANA INGRÉDIENTS ACTO CAPITAL FACE À SON IMAGE SOCIALE Retour sur le parcours Recentrages, consolidations, La structure fonds direct Devant les attaques,le monde du Lbo original de cet entrepre- diversifications… La société de Finama PE s’est fait un prépare une réponse sociale… neur des médias devenu a trouvé la bonne recette plaisir d’élaborer une stra- www.pemagazine.fr porte-parole du avec ce premier Lbo tégie différencian- Transparence et partage des plus-values cap-dév. français. mené par Cognetas. te. Avec succès… semblent les meilleurs arguments. > p. 12 > p. 24 > p. 32 > p. 26 036-037deals 30/05/07 10:55 Page 36

KEY E: equity D: debt M: mezzanine L: legal adviser Deals table F: financial adviser A: accounting adviser Each month, Private Equity Magazine presents T: technical adviser (strategy, a selection of deals, in France or in Europe. insurance, environment…)

DEAL VALUE TARGET FINANCIAL INVESTORS (%) EXITING INVESTORS (%)

4,850 M€ TDF (France) TPG (42%), CDC (24%),Axa PE (18%), Charterhouse (14%) Charterhouse (55%), CDC (30%), E 1,000 ADVISERS : F: Merrill Lynch;Toulouse & Ass.; L: Bredin Prat; Cleary Gottlieb; CDC Entreprises (14%) D 3,900 Shearman & Sterling; Latham & Watkins; Mayer Brown;Taj; A: KPMG; Deloitte; ADVISERS : F: HSBC; A: E&Y TAS; T: OC&C; T: Marsh; D: Citigroup, BNP Paribas, Merrill Lynch, Morgan Stanley, HSBC L: Ashurst; E&Y LF

LBO 2, TELECOMS Texas Pacific Group (with 42%) and Axa PE (18%) made a new Lbo on TDF,for 4.85 billion euros,about 10.9 time the Ebitda 2006, after one set up in 2002 by Charterhouse and CDC (with A CDC Entreprises) in two stages.Two of the three former players, who had organised a refinancing in early 2005 and multiplied their initial stake by nearly 3 (with the early 2005 refinancing), are reinvesting respectively at 14 and 24% (with the management rising to 2%).The business plan established by the new president since June, Michel Combes, anticipates turnover increasing from 954 million euros in 2005 to 1.2 billion in 2010 to assist the broadcaster’s clients in the changeover to all numerical (TNT,TVHD, cell phone television in DVB-H mode, numerical radio, etc.), in France but also abroad (Slovakia, Spain, etc.). But it needs new capital: although several financiers were interested (BC Partners, Cinven, Eurazeo, Macquarie,Wendel have been mentioned), two consortiums (with PAI-Goldman Sachs) have been present in the pre-emptive offers before even the standard auction was set up, and have precipitated a sale in record time. Debt would rise to 3.97 billion (more than 8 times the provisional Ebitda), including 450 million in lines of credit for financing acquisitions.The future build-ups of the ex France Télécom subsidiary (after Antalis and SmartJog, see the pages about launches) might reach 1 billion in five years.With debt mostly to be repaid in fine,TDF wants to consecrate a large part of the resulting cash flow (438 million Ebitda 2006) to invest another billion in numerical infrastructures. TPG:T.Serra, P.Costeletos;Axa PE: Dominique Senequier,D. Gaillard; Charterhouse: L. Giaccomotto; CDC: D. Marcel, J. Bensaid 3,460 M€ Vivarte (France) Charterhouse PAI Partners (66%), Sagard ADVISERS ADVISERS F: Goldman Sachs; Hawkpoint; F: Rothschild & Cie;

LBO 2, RETAIL L: Ashurst;Wilinski Scotto;Wilkie Farr; Linklaters; E&Y LF; T: OC&C; D: RBS; A: EY TAS JD: Gide Loyrette Nouel

PAI has sold Vivarte to Charterhouse for about 3.46 billions, 9.5 times the Ebitda for 2006. PAI had removed the footwear and clothing distributor from quotation in April 2004, valuing A it at 1.5 billion.This offers the funds almost 5 times their stake – Sagard which came as support should keep its approximately 10%.With Georges Plassat at its head,Vivarte has increased its Ebitda by 60% in three years.The group (2.3 billion turnover 2006, 360 millions of Ebitda) has achieved some major optimisation work on sourcing, Kookaï’s turnaround, making the most dynamic use of all the shops, closures, re-localisations, renovations – notably of La Halle and La Halle aux Chaussures – openings or repurchasing of franchise outlets… Being unable to make an understanding with Charterhouse, the Descours family (22,8%) is also bowing out, and while the management has reached almost 15%, Georges Plassat 10%, the 15,000 employees are potentially at 5% via a bonus to be reinvested.After taking over Naf Naf and Beryl, the package will finance the movement towards Europe (notably the South) and the new sectors (accessories, perfume). Charterhouse: L. Giacomotto, S. Morgan; PAI Partners: M. Paris, E. Bouchez; Sagard:A. Ernoult-Dairaine;A. Chevrière

2,400 M€ Lafarge Roofing PAI Partners (65%), Lafarge (35%) Lafarge (100%) E 600 France) ADVISERS ADVISERS D 1,800 F: BNP Paribas; Morgan Stanley; Goetzpartners CF; Callisto; L: Wilkie farr; F: JP MOrgan; Rothschild & Cie; Allen & Overy;Wilinski Scotto; E&Y LF; A: PwC TS; L: Freshfields T: Roland Berger; Creative Value; D: BNP Paribas; JP Morgan, Bank of A: PWc TS America; SG CIB; Mizuho Beating LBO France, (who already owns Terreal), PAI took up 65% of the capital of Lafarge Roofing based on an enterprise value of 2.4 billion euros (including 420 millions of A existing debt), 9 times the anticipated Ebitda for 2006. Lafarge (16 billion euros turnover in 2005) is refocusing around cement and concrete, ans spins off its roofing business, LBO, BUILDING, CHEMISTRY although it is world n°1 with a 1.5 billion turnover, 12 000 staff in 162 sites in 35 countires.All the same, the industrialist is reinvesting 35% in this deal, which might expect to follow the same course as Materis (the former speciality building materials division which has undergone three Lbos in five years). Roofing components offer excellent development potential, with the possibility of offering innovative solutions for the Asian, Central and Eastern Europe markets, and also the United States for certain kinds of tiles. Development will come through external growth, which was initiated in 2006 with the Mexican Clay Tile Venture, the German Hausprofi Bausysteme (roofing components), participation in Earthcore Industries (Etats- Unis), and shortly in Kulu (South Africa). PAI Partners: B. Meunier, O. de Vregille, M. Paris, N. Holzman

1,040 M€ Amec Spie (France) PAI Partners Amec (United Kingdom) E 350 ADVISERS : F: HSBC; Deutshce Bank; Hawkpoint; L: Wilkie Farr;Allen & ADVISERS D+SL 600 Overy; Lovells; E&Y LF; A: KPMG TS; T: BCG; D: SG CIB; BNP Paribas; F: Citigroup; UBS IB; L: Linklaters; M 100 L/D : Freshfields A: KPMG TS (in Manchester) LBO, BUILDING By responding quickly, notably on debt structuring, PAI has overtaken numerous candidates (including certain industrial groups like Vinci which need authorisation under the competition A rules) to take over Amec Spie.The British engineering group Amec (quoted on the London stock exchange) has completed the sale of its French subsidiary for 1.04 billions (about 980 millions plus cash), which is about a third of the group activities, as part of a reorganization announced in 2004.Amec Spie conceives, installs and maintains (like Cegelec) electric, mechanical, climate and communications equipment for companies and local administrations.The bought businesses (with a share of the railways joint venture in Great Britain but without the pipeline subsidiary Spie Capag) generated 2.66 billion euros turnover in 2005, for 107 million Ebitda. Management is taking a significant share of the capital and the 23,000 employees will be associated via a FCPE.The debt of 770 million (6.6 times the 2006 Ebitda) is based on three major segments (135+130+130, plus residual debt), a second lien, a mezzanine debt and an acquisition line, before the refinancing of the securisation programme for 150 million launched a year ago.This is the strategy: continuing the build-ups started a few months ago and even increasing the size of certain targets. PAI: Bertrand Meunier,Olivier de Vregille, Nicolas Holzman, Mathieu Paillat You can send us your press releases about deals by email to : [email protected] 36 PRIVATE EQUITY MAGAZINE | June 2007 | Special issue | 036-037deals 30/05/07 10:55 Page 37

DEAL VALUE TARGET FINANCIAL INVESTORS (%) EXITING INVESTORS (%) 670 M€ Desjonquères Sagard (40%), Cognetas (40%) Saint-Gobain E 370 (France) ADVISERS: ADVISERS D+SL 245 F: UBS IB; Lincoln International; L: Latham & Watkins; Landwell; A: PwC TS; F: BNP Paribas; Callisto; L: Bredin Prat; Fidal; M45 T: Mercer MC-Oliver Wyman; D: RBS; UBS; L/D: Ashurst A: EY TAS; T: Bain; ERM By overtaking PAI, 3i, Carlyle and LBO France, Cognetas and Sagard are becoming the owners of Desjonquères, Saint-Gobain’s perfume bottle making business. Financed by a 490 millions A debt, including B and C segments of 200 millions each, a mezzanine debt and a second lien of 45 millions, the deal values the company at 670 million euros and allows both funds to divide up about 80% of the capital in equal shares. Desjonquères, whose clients include the biggest names in perfume (Channel, Hermès…), bases its development on top-of-the-range

LBO, PACKAGING, LUXURY LBO, PACKAGING, specialisation in Europe and North America, and on winning mass markets in countries where the luxury market is in full flow, notably South America and India, with possibilities for acquisitions.This group is managed by François Dujardin, employs 4 600 staff on 11 industrial sites and achieved a 607 million turnover in 2006, with an operating result of 50 millions. Sagard: Christopher Spencer, Philippe Lagarde ; Cognetas: Edward Koopman, Cédric Rays 460 M€ KP1 (France) Doughty Hanson (75%) Alpha Associés (55,6%), AlpInvest E 130 ADVISERS (16,7%), Koramic D 330 F: Arjil Groupe Altium; Callisto; L: Skadden Arps; Bignon Lebray; Landwell; ADVISERS: F: Lazard; L : SJ Berwin; A: KPMG TS; T: ERM; D: Calyon; L/D: Gide Loyrette Nouel A: E&Y TAS; T: Estin & Co; URS; Marsh Doughty Hanson, the fund led in France by Yann Duchesne, associated with the management led by Jean-François Trontin, which increases its capital share from 11 to 25%, is taking over LBO 2, BUILDING A KP1 alongside Alpha Associés,AlpInvest and the Belgian group Koramic.The Avignon company, created in 1959, is the French leader in prefabricated contruction systems for the building industry: flooring, various structures and supports (small beams, concrete shuttering, etc.) in pre-stressed concrete. KP1 generated a 310 million turnover in 2006 (+13%, 40% of the French market), with 60 million Ebitda. On a market whith stron entree barriers, the company possesses a complete industrial base (19 production sites plus 2 in Poland) and distribution system (12 agencies and warehouses) in France.The debt presupposes future development, with organic growth and also complementary acquisitions; smaller players in France, but mainly abroad (3 or 4 targets have been identified)… The British fund might also reinvest if needed. Doughty Hanson :Yann Duchesne, Pascal Koetgens 425 M€ Novasep (France) Gilde, Banexi CP, BNP Paribas (72%) Rockwood Holdings E 110 ADVISERS: F: Aforge Finance; L: White & Case; Lovelles; Mayer Brown; ADVISERS D+SL 260 Gegout & Gutton;Taj; A: Dloitte; T: Arthur D. Little; URS;Aon; D: ING, HVB; F: JP Morgan; Cazenove; Lazard; L: Debevoise & M45 L/D: Linklaters Plimpton; Landwell; A: PWc TS; T: ERM

LBO, CHEMESTRY Gilde bought Novasep from the American specialty chemicals Rockwood.The management is increasing its capital share from 21 to 28%.The Lorrain industrial group is an expert in A chemical synthesis and the purification of complex molecules for the pharmaceutical industry, and is valued at 425 million, nearly 8 times the 2006 Ebitda. Gilde has invited Banexi, which had been a group shareholder between 2000 and 2004 (n°3), and BNP Paribas (which is one of its LPs). The financial package comprises 230 million of senior debt (17-106.5-106.5), a second lien of 35 and mezzanine debt of 45 million. A 45 million revolving credit and a 50 million capex line are not included in the closing. Having merged with Dynamic Synthesis in 2004, the company is assuming a 280 million turnover for 2006 with 1 300 employees. Its revenues should increase 40% in the next five years through internal growth.Acquisitions are also anticipated. Gilde: P.Bekx, H. Lange, B. Barrière ; Banexi: Christine Mariette,Anne Robert ; BNP: Claire Gawer 350 M€ Via Location Weinberg Capital Partners Edmon de Rothschild CP (52%) E 220 (France) ADVISERS: L: Sj Berwin; LMT Avocats;Taj; A: Deloitte TS; T: Marsh; D : SG ADVISERS: F: Rothschild & Cie; L: Linklaters; D96 CIB; M : ICG; L/D : Gide Loyrette Nouel; Latham & Watkins CMS BFL; A: KPMG TS; T: Arthur D. Little M30 LBO 2, SERVICES In competition with other funds,Weinberg CP takes over Via Location for nearly 350 millions, 7 times the 2006 Ebitda. EdRCP came in during January 2004 through a pre-emptive offer. A Since then, the group headed by Nicolas Truelle, which is the second-largest independent multi-specialist in renting industrial vehicles in France (with 7,000 vehicles, 62 agencies), behind Fraikin, has re-focused its core business activities on long term rental without drivers or maintenance, and has raised its Ebit by 75% to 19.7 millions, in spite of a more of less stable turnover at 127 millions.The departing investor generates a net IRR of 37% and a multiple of 2.6, while still retaining 20% of the capital, just like Financière Dentressangle, long term shareholder and ICG (nearly 30% with the management).The financing is made of a senior debt of 96 millions, a capex line of 230 millions, a 10 million revolving credit, and a mezzanine debt of 30 millions.WCP wants to develop its sales force in France, with about fifteen agencies opening in the mid term, as well as abroad. Weinberg CP: S.Weinberg, P.Klocanas ; ERCP: E. Fouque, H. Fonta

315 M€ World Fight LBO France Vinci E 50 Services (France) ADVISERS: ADVISERS: D 270 F: OES; L: Mayer Brown; Sarrau Thomas Couderc; A: Conseil Audit & F: Rothschild & Cie; Close Brothers; E&Y LF; A: Synthèse; T: Bain & Co; D: ING; J/D: Linklaters E&Y TAS; L: White & Case; E&Y LF LBO France is taking over World Flight Services for 315 million euros (share value net of cash and residual debt), a sale which is part of the assets sale programme announced by Vinci at A the acquisition of ASF last winter.Created in 1984,WFS became the Vinci airport services subsidiary in 2001.This disputed deal (notably against Midocean Partners) lets the financier get his hands on a services company with a 505 million euros turnover in 2005 (11 000 employees, mostly in Europe and in the United States), made from airlines: handling and services linked to air

LBO, SERVICES, TRANSPORT freight (loading planes, runway services, sorting and transferring backage, etc.), as well as ground services directly linked to passengers, which play a less significant part since acquiring France Handling in 2005. Between corporate debt (including a credit lease) which is still to be refinanced, a senior in three tranches, a second lien and mezzanine, the leverage amounts to 65% of the total amount. LBO France: R. Daussun, J. Guez 310 M€ Gerflor (France) AXA PE (>50%), Barclays PE, Natixis Industrie, ICG PAI Partners, CDC Entreprises END ADVISERS: ADVISERS: D+Sl 190 F: Calyon; Callisto; L: Linklaters; Sarrau Thomas Couderc; A: Pwc TS; T: ERM; F: Rothschild & Cie; L: Weil Gotshal; E&Y LF; M45 D: BNP Paribas, ICG; M: Euromezzanine; L/D: Eversheds A: E&Y TAS; T: Bain & Co; URS LBO, BUILDING It’s the third Lbo for Gerflor after Europe Capital Partners (in 1992) and then the present sellers (in 1998).Axa PE, associated with the management, are thus taking over the group, which A specialises in the production/distribution of PVC ground coverings for professional or residential use, for about 310 millions from PAI and CDC Entreprises.The fund is supported by Barclays PE as well as Natexis Industrie and ICG, who are renewing their confidence in the group.A staple financing brings a senior debt of 165 millions (three tranches) a second lien of 20 millions, a mezzanine debt of 45, as well as the usual revolving and capex lines.The former subsidiary of BP has suffered from the rising price of petrol and instability in management before the arrival of Bertrand Chammas, who has re-launched the enterprise since 2003, facilitating a recapitalisation at the end of 2005.The Rhodanien group (1900 employees, 7 production sites, a 336 million 2005 turnover) predicts a more than 350 million 2006 turnover thanks to a sales force grouped by profession (BTP,transports equipment, sport, etc.), and with internationally recognised brand names and standards. Axa PE: D. Gaillard, E. Neuplanche ; Natexis Ind. : Caroline Joubin, S. Frédéric Ferrand ; Barclays PE: G. de Blignières, L. Chauvois ; PAI:A-J. Motte ; CDC Entreprises: O. Boyadjian You can send us your press releases about deals by email to: [email protected] | Special issue | June 2007 | PRIVATE EQUITY MAGAZINE 37 038-039deals 30/05/07 10:57 Page 38

DEAL VALUE TARGET FINANCIAL INVESTORS (%) EXITING INVESTORS (%) 236 M€ Go Voyages (France) Financière Agache PE (75%) Accor END ADVISERS: ADVISERS D 117 F: FDR Finance; Credit Suisse; L: Clifford Chance; Sarrau Thomas Couderc; F: Deutsche Bank; L: Debevoise & Plimpton; M35 A: KPMG TS; AS: BCG; D: SG CIB; M: European Capital Bigon Lebray The Financière Agache PE carries out its first LBO with Go Voyages for 281 millions (including a cash of 45 millions).A real contest continued up to the two final bids (with CDC Capital).The A company, with a 60 million turnover and 16 million 2006 Ebitda (20 predicted for 2007), is valued around 14 times this ratio.The transaction is 55% debt financed.This is a return to familiar terrain for the manager of the fund created not long ago by Bernard Arnault. He had already acquired it for Accor in 2000 (for less than 60 millions at the time).The discount travel agent relies on its

LBO, TOURISM, INTERNET founder managers, Carlos Da Silva and Nicolas Brumelot, who hold from 25 to 30% of the capital along with 70 collaborators. It benefits from a large and increasing free cash flow, a negative BFR and a low capex.With 30% of a strongly growing market where there are major barriers to new entrants (for example with access to GDS such as Amadeus). Objective: to pursue growth (30% a year), notably by duplicating the model in Europe (Spain, Belgium, Italy, etc.) and increasing the available services with hotels and car rental. Financière Agache PE : J-M. Espalioux 170 M€ Un Jours Ailleurs AtriA Capital Partenaires, UI Gestion (56%) Astorg Partners E50(France) ADVISERS: L: Paul Hastings; Sj Berwin; A: Sofidec; D: IKB; Ixis CIB; M: ADVISERS: F: Rothschild & Cie; L: Ayache D90 Euromezzanine; J/D: Linklaters Salama & Associés; Landwell; A: PwC TS

LBO 2, RETAIL M30 AtriA won the auction for the ready to wear clothing chain Un Jour Ailleurs. It has invited along UI Gestion with whom it holds 56%, the founder (Félix Soussan) keeping 35%, and the ma- A nagers have the balance.The team, at thata time manager of the CFi portfolio, already had a minority holding from 1995 to2002.They replace Astorg Partners, who achieve a 2.3 multiple in three and a half years.The turnover has since risen from 95 to 114 million euros in 2005 (with 750 employees).The Ebit has reached 21.5 millions for the 158 shops (the vast majority owned, and about twenty with affiliated management), including 22 abroad.This secondary LBO values the company at over 170 millions, 70% financed by senior and mezzanine debt.The funds are happy with this continuity with a strong brand name for the forty to fifty-five age group (mainly ceremonial clothes), and hope, like Patrick Defauw, who should be gradually take command of the corporate name, to spread the European network, with priority for Italy, Belgium and Spain. AtriA : P.Bertiaux, L-E. Michel-Weltert, Sophie Pourquéry,F.Sultan, UI Gestion : O. Jarrousse, F.Gressant

160 M€ Paster Cerba (France) Industri Kapital Astorg Partners (70%), ICG (10%) ADVISERS: F: Rothschild & Cie; L: White & Case; LMT Avocats; A: E&Y TAS; ADVISERS: T: URS;Aon; D: Natixis; M: ICG; JD: Shearman & Sterling F: HR Finance; L: SJ Berwin; L: KPMG TS

LBO 2, MEDICAL Industri Kapital has just entered the capital of the specialist medical analysis laboritory for more than 150 millions (via Cerba European Lab holding). Created in 1967, the Cerba laboratory A merged with the Centre de Biologie Médicale Spécialisée of the Institut Pasteur in 1999 to become Pasteur Cerba in 2002.The French group had been the object of a first Lbo with Initiative & Finance and Natexis Industrieien 1999 and then a second in 2002 with Astorg Partners in association with the biologists and the management.This third LBO shares out the capital between IK, Astorg (who retain 10%), ICG and the managers led by Catherine Courboillier and Christine Bergeron since 2005 and the retirement of the manager.The group carries out specific analyses for laboratories or hospitals. French leader with 40% of the market, it generated a 100 million euros turnover in 2005 with 500 employees. Its ambition: to spread into Europe, notably by acquisitions which the sellers who would already have achieved more than 40% of IRR if they stopped there, have prepared and therefore wish to continue their support. IK: Christopher Masek, Dan Soudry, Rémi Buttiaux;Astorg:Thierry Timsit, Christian Couturier 128 M€ Bretèche Industrie Banexi Capital Partenairses (51%), Unigrains (17,5%) Fondateur (50%), CAPE, Crédit E 51 (France) ADVISERS: Mutuel Océan , IPO D57 L: UGGC; A: Bellot Mullenbach; T: ERM; Marsh; ADVISERS: M20 D: LCL; M: Céréa Gestion; Mezzanis; Idia; L/D: Salans, Orsay F: Aforge Finance; L: Weil Gotshal Banexi CP (with 51%) has allied with Unigrains (17,5%) to take over the Bretèche group, which designs, builds and installs industrial equipment for agribusiness.The founder Daniel A Bréfort keeps 30%, the rest going back to the management. Fifty per cent financed by debt, this MBO allows for the minority holdings, CAPE, CMO and IPO to exit (they were entered by

LBO 2, FOOD INDUSTRY purchases since the origins in 1988).The company operates in three sectors; bakery (world leader in kneading troughs with VMI and Diosna), milk and cheese (European leader for cooked and soft pasta with Chalon-Mégard,Technal and Simom), and slaughterhouses. It achieved a 136 million turnover in 2005 (it hopes for 150 millions in 2006, including 60% abroad) and a 10.2 million Ebit.Apart from external growth, always possible to complete the product range, the business should grow by 5% a year in the future. Banexi CP: M. Rowan, P.Jourdain,A. Dubut ; Unigrains: M-O. Bosshardt,A. Peyronnet, C. Chaumien 120 M€ Batisanté (France) 21 Centrale Partners, European Capital CDC Entreprises Capital E50 ADVISERS: F: BNP Paribas; L: Mayer Brown; Orsay; ADVISERS: F: Transaction R Rothschild; D40 D: BNP Paribas; M: European Capital; J/D: Clifford Chance; Cleary Gottlieb L: August & Debouzy M30

LBO 2, SERVICES 21 Centrale Partners has taken a majority share (55%) of Batisanté along with the management (35%) and European Capital (10% with 5 million in shares and OC).The financing A includes a senior debt of about 40 million and a mezzanine (junior and senior) of more than 30 million. Founded in 1987, and then supported in an Obo by CDC Entreprises from 2003 onwards, the group is experiencing 20% annual growth (on a turnover of 40 million in 2005 and a good profit margin) based on offering reglementation services for the home and outside. Originally a specialist on 3D Hygene (disinfection, destroying insects, etc.), Batisanté has been able to set out its position on fire security and then the inspection and health and safety of buildings (lead, asbestos, etc.). One of the principal players in the Paris region market, it hopes to become important nationally and take advantage of possible new reglementation about controlling electrical safety. 21 Centrale Partners:Antoine Pupin, François Tranié; CDC Entreprises Capital: Olivier Boyadjian,Vincent Jonquières 90 M€ Metall Technologie European Capital (83%) Abyer LBB PE, Hannover Finanz E35(France, Germany) ADVISERS: L: Cleary Gottlieb; Landwell; A: PwC TS; T: LEk Consulting; (86%) D45 Marsh;Winston & Stawn; D: European Capital; HSH NordBank ADVISERS: F: Lincoln Internationa; L: Sj Berwin M10 European Capital makes its third deal by taking over the Franco-German industrial group Metall Technologie from Bayern LB PE and Hannover Finanz, who carried out a secondary LBO, IND. GOODS A Lbo themselves in 2003 after Barclays PE, which had put together the group in 1999, buying three factories from the English firm Bodycote. European Capital is taking 83% (the management moving from 14 to 17%) in a “one stop buyout”, even if the fund has found a partner in HSH NordBank for the senior debt.To this combination (45 million senior and 10 million mezzanine debt) should be added a capex line and an acquisitions line (10 million each).The company, based in Germany and the Isère, designs and assembles very high technology furnaces for treating hi tech materials for the nuclear, thermal, car and ceramics industries, etc.The activity includes the installation and maintenance of plant and equipment for groups like Air Liquide,Total, Bosch, Siemens… Mettal Technologies has a 60 million turnover (with15 to 20% Ebitda) and has just bought a factory in China to support its clients there while awaiting the construction of others there. Developments are also planned in Eastern Europe and Turkey. European Capital: Etienne Haubold, Olivier Méline, Jean Eichenlaub You can send us your press releases about deals by email to: [email protected] 38 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 038-039deals 30/05/07 11:04 Page 39

DEAL VALUE TARGET FINANCIAL INVESTORS (%) EXITING INVESTORS (%) > 80 M€ Sofitel Royal Casino Chequers Capital Accor Casino Mandelieu (France) ADVISERS: ADVISERS: L: CMS BFL; Jean-François Martin; A: Deloitte TS; T: MKG; Marsh; D: SG CIB F: Close Brothers; L: Darrois Villey

Chequers has concluded the acquisition of Sofitel Royal Casino de Cannes Mandelieu from Accor Casino.The competition regulators insisted on this transfer, following A the merger of Accor Casino with the Groupe Lucien Barrière. It is worth more than 80 million euros, with senior debt and mortgage credit.The package includes the casino,

LBO, TOURISM, HOTEL which registered a net profit from gambling of 26 millions in 2005, but also the hotel Sofitel de Cannes Mandelieu (220 rooms), on an exceptional site with direct access to the sea bordering a golf course (a 15 million euros turnover).The transaction includes the walls and the business assets. Chequers will make major investments to renovate this luxury hotel and make the casino more alluring – within the specifications – possibly by buying other gaming establishments. Chequers Capital:Anne-Claire Boutant-Louvet, Stéphane Mulard

20 M€ Vacances Acto (50,1%) Founder E 50% Directes ADVISERS: L: Wilkie Farr;Ayache Salama & Associés; UGGC; A: Grant ADVISERS: L: Cornet Vincent Ségurel; D 50% (France) Thornton TS; T: CM International;Aon; D: BNP Paribas Michel Hervieux

LBO, TOURISM A tourism specialist for hotels and open air camping,Acto, the direct investment arm of Finama PE, is taking over 50.1% of Vacances Directes alongside the management (49.9%). A It is subscribing convertible bondss which will allow it, after conversion, to attain 70% in the number 2 in rented mobile homes in France, valued at between 20 and 30 million euros. The economic model is half way between manager (already present in the following portfolio companies of Acto: CIAT for camping, Odalys for tourist homes,VVF for holiday villages) and tour operator: the Breton PME (small to medium-sized enterprises) rent spaces in 85 camp sites by the year, where it installs mobile homes which it then commercialises with its clients, allowing the owners of camp sites to make sure of their occupation rate and to be able to have access to a pool of mobile homes without making direct investments.Vacances Directes (4 000 mobile homes) shows 15% annual growth, with a 14 million turnover and an Ebitda margin of nearly 50%. It intends to increase its housing capacity by 400 spaces each year. Acto: S. Moreau, J-M. Scéo, Marie Arnaud-Battandier

> 5 M€ IES Synergy Demeter Partners (81%) CDC Entreprises, CIC E 50% (France) ADVISERS: Investissements Alsace (81%) D 50% F: Grant Thornton CF; L: Brunswick Société d’Avocats; ADVISERS:

LBO, ENERGY D: Société Bordelaise de CIC F: Financière de Courcelles; L: Orsay

Demeter Partners has taken an 81% stake in IES Synergy, the Montpellier electronic equipment maker specialising in battery chargers for all kinds of electric vehicles, and power A converters for energy stations.The CDC Capital Investissement fund and CIC Investissements Alsace, which took a share of the capital in 2001, are finalising their departure and the management keeps 19% of the capital. Demeter’s investment is of 2.5 million euros, with a moderate debt to equity ratio. IES Synergy achieved a turnover of 5.6 million euros over the financial year 2005-2006 and should have 10% growth over 2006-2007.The objective is to double the turnover in three years by counting on the development of renewable energy (batteries for wind farms and solar panels) and entering the American market. Demeter Partners: Stéphane Villecroze, Bastien Gambini

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DEAL VALUE TARGET FINANCIAL INVESTORS (%) EXITING INVESTORS (%) 24,3 M€ Cytheris (France) CDC Entrepirses Innovation, ABn Amro, CAPE, Axa PE, Founders T2C2, Bioam ADVISERS ADVISERS: L: Latournerie Wolfrom; Sj Berwin L: Jones Day

Cytheris is a company which specialises in the development of immunological drugs, and has just enjoyed a second financing round of 24.3 million from seven investors, led by CDC

VENTURE 2, BIOTECH A Entreprises, a new entrant with ABN Amro NV,alongside Axa PE, Bioam, Crédit Agricole PE, the Canadian seed capital fund T2C2 and the Caisse de Dépôt et Placement du Québec.This French bio-pharmaceuticals firm was created in 1999 before raising 6.9 million in the first round in 2002.This new funding should give it the means to sustain its star product, a stimulant to the immune system for resisting the consequences of HIV,hepatitis C and certain cancers up to phase II. Further on, to finance a phase III, the company might make an agreement with an industrial firm or envisage a possible IPO.A second product might then be sustained until the pre-clinical stage, or even to stage I, before a possible external licensing. CDC Entreprises Innovation: J-C. Renondin ;ABN Amro: B. Bergstein ; CAPE: P.Guinot ;Axa PE: G. Richard ;T2C2: B. Cayrol ; Bioam: O. Martinez

12 M€ ERYtech Pharma AGF PE, Auriga Partners, Axa PE, Cap Décisif, Amorçage Founders (France) Rhône-Alpes ADVISERS ADVISERS: L: Alérion L: Lamy & Associés The biotechnical firm ERYtech raised 11,5 million euros from AGF Private Equity,Auriga and Axa Private Equity, followed by CapDecisif,Amorçage Rhône-Alpes and business angels who A have participated in the seed capital of nearly 1 million since its creation by Yann Godfrin and Pierre-Olivier Goineau at the end of 2004.The financiers become majority shareholders in the Lyon company, which possesses patents for innovative technology which allows it to encapsulate molecules or enzymes in red globules on an industrial scale as part of cell therapy against acute leukaemia (with asparaginase) or enzyme replacement for small children’s genetic ailments.This process has two advantages for the life of the drug (and hence its effectiveness) and its toxicity: immunological-allergic reactions may affect half the target cases.Already in phase II, the treatment for acute lymphocytic leukaemia may be commercialised in late 2009. Until then,

VENTURE, BIOTECH, PHARMA ERYtech will build a production unit to prepare the red globules to be transfused to patients according to medical needs. AGF PE:Thierry Laugel;Auriga Partners : Franck Lescure ; Axa PE: Glenn Richard ; CapDecisif : Jérôme Snollaerts ;Amorçage Rhône-Alpes: Karine Lignel

12 M€ Exalead (France) Qualis SCA Founders ADVISERS: L: Bredin Prat ADVISERS L: Reed Smith Rambaud Martel

Shareholder from the start, Qualis SCA continues to support Exalead, the Made in France Internet search engine, by bringing a new 12 million euros to its capital.The industrial A investments company (Française de Palettes, CTN, SGCC,Akerys, etc.) has invested 21 million in four financing rounds since the creation of the start-up in 2000. From the VENTURE 2, INTERNET beginning, Exalead has created its market with enterprises in proposing an integrated motor for Internet and the PC user, or indeed for Internet, the PC user and the enterprise’s own network. It has already attained a reasonable turnover (3.5 million in 2006) before launching its new version intended for the general public and which should represent two-thirds of its activities in five years time. Exalead claims 8 billion references to Web pages, not so far behind the 12 to 15 billion attributed to Google or Yahoo.This increase in its own funding should speed up the commercialisation of the engine, notably internationally: the United States, Italy, Germany, United Kingdom, etc. Qualis SCA: Emmanuel Coste, Robert Léon

9 M€ EyeGate (France, Nexus, Innoven Partenaires, Ventech Founders USA) ADVISERS: ADVISERS L: Bingham; SJ Berwin; T: Cooper & Dunham; Regimbeau & Associés EyeGate Pharma was born under the name of Optis in 1998 as a Parisian start-up, commencing operation in the United States in 2005. It has carried out a second financing round in two A stages with the American VC Nexus (for about 1.5 million euros), as well as Innoven Partenaires and Ventech, who started to finance the first stage last year (6 million) and are completing the second (1.5 million).This biotechnical firm has perfected the technology to deliver intraocular drugs into the eyes by cathodermie, (using an electric current to place the active formula into the VENTURE 2, BIOTECH target zone). Drugs for the eyes have greatly advanced in recent years, but the means of applying them, especially to the back of the eye, are still inadequate.This technique has been used for a long time for other pathologies and was tested for the first time for ophthalmology on man in 1999 – just when Ventech financed a first round of 3 million – having been developed since in the United States, it might undergo clinical trials in phase II. Innoven Partenaires: Jean-Sébastien Cleiftie;Ventech:Alain Maiore ; Nexus Group :Thomas Hancock

7 M€ DailyMotion (France) Atlas Venture, Partech International Founders ADVISERS: ADVISERS L: Jones Day F: Clipperton Finance; L: Bird & Bird

Atlas Venture and Partech International have been impressed by French community site DailyMotion, which allows Internet users to share their videos for free. Internet specialists A are talking about a new use for personal videos with the media content generated by the users themselves (User Generated Contact - UGC). Founded in 2005, the start-up which VENTURE, INTERNET has received 7 million euros is being very successful, with a bit more than 13 million pages a day (not just in France). It might take advantage of the success of MySpace and YouTube, taken over respectively by Newscorp (in March for 580 million dollars) and Google (early October for 1.65 billion dollars) if the future shows that they can make a profit from the communities they have bought. It should thus rely more on exchanging videos than on the sale of its software specialised in building community sites (such as the site Wat.tv for TF1) to grow in Europe. Atlas Venture: Marc Oiknine, Fred Destin; Partech International: Philippe Collombel

4 M€ Wyplay SAS (France) Sofinnova Partners Founders, CPR PE ADVISERS: ADVISERS: L: SJ Berwin L: Adam Vermot-Desroches Wyplay, a pioneer company in the development of mass public products for numerical television, has finalised a 4 million euros financing round with Sofinnova.The company was A founded in March by Jacques Bourgninaud’s team, and designs the hardware and software for an innovative “media centre/all in one”, which will present a full range of functions linked to multimedia based on television: hardisc/DVDreader/homevideo, decoder, recording and stocking music on CD, films, photos and images, numerical radio, etc.This product is very

VENTURE, ELECTRONIC easy to use and is good value for money compared with the complex servers now on the market, and was presented at the Consumer Electronic Show 2007. From an electronics market for the general public estimated to be more than 166 billion dollars in 2005 (+20% a year),Wyplay hopes to help users replace all their appliances with a single box linked on one side to Internet (with all possible convergence) and on the other to their television. Sofinnova Partners:Alain Rodermann You can send us your press releases about deals by email to: [email protected] 40 PRIVATE EQUITY MAGAZINE | June 2007 | Special Issue | 041-041exits 30/05/07 13:00 Page 41

KEY E: equity D: debt M: mezzanine Exits table L: legal adviser F: financial adviser Each month, Private Equity Magazine presents A: accounting adviser T: technical adviser (strategy, a selection of exits, in France and in Europe. insurance, environment…)

Vendor: L Capital (75%) Vendors: Advent Int., Goldmand Sachs Transaction value: 88 M€ Transaction value: 865 M€ Target: Forté Pharma (France) IRR announced: > 100% Target: Sportfive (France) Multiple: x3 New Investor: Natraceutical Turn over 2005: 48 M€ New Investor: Lagardère Group (100%) Turn Over 2006: 600 M€ In september 2006, L Capital had sold Forté Pharma L Capital: Philippe Franchet Advent International (75% with Goldman Sachs CP Ebitda 2006: 360 M€ EXIT, LEISURE EXIT, Ato Natraceutical for 88 million euros (including 6 mil- ADVISERS Aand the management), and the RTL Group sold Sport- Advent International:

EXIT, PHARMA CY EXIT, lion cash).This price is 11 times the provisional 2006 Ebitda for five, the company leader in managing marketing and televi- Pascal Stefani EXITING INVESTORS sion rights for European football, to the Lagardère Group for the target, which achieved a 40.8 million turnover in 2005. ADVISERS Entering the company in 2001, the fund had invested 5.8 mil- F: Close Brothers 865 million euros. It won the deal thanks to its special strate- lion euros during a capital increase an purchase of securities L: Cleary Gottlieb; Fidal gic approach to communications and sports media. Present in EXITING INVESTORS (35% at the time) and then financed an Mbi in 2003, which A: KPMG TS the entire world, Sportfive (with a 600 million turnover) is F: Morgan Stanley; has allowed for Alain Boutboul to be nominated at the head of T: Advention notably the sole agency for marketing the media rights for the Goldman Sachs; L: Ashurst Forté Pharma. Since then, L Capital controlled 75% of this 2008 football European Championship, as well as 30 pro- pharmaceutical group specialising in nutrition complements NEW INVESTORS fessional football clubs, including a good proportion of the NEW INVESTORS for the slimming, health and beauty sectors. Thanks to a new F: Riva y Garcia French and German teams, and 270 associations in Europe. The fund, achieving “the expected multiple for four years” in F: Calyon CIB; marketing approach, the company has grown strongly, L: Garrigues;White & Case Goetzpartners CF two and a half, notably after refinancing in October (by Dres- increasing its sales five-fold in five years, especially in Europe. A: E&Y TAS; It represents a complementary activity to its Spanish buyer dner Bank) with 545 million debt, has helped the manage- L: Clifford Chance; E&Y LF (mostly functional food). Natraceutical (with a 2005 turnover ment led by Alain Krzentowski towards development which of 53 millions and 3.8 of profit) has notably financed the few people would have believed. Notably on the interna- acquisition by increasing its capital by 60 millions on the tional front, thanks to his networks which have facilitated the Madrid stock exchange. enlargement of the rights portfolio.

Vendor: Astorg Partners (57%) Vendor: Barclays PE (55%) Transaction value: 450 m€ Transaction value: 180 M€ Target: Sebia (France) Multiple announced: x10 Target: Laho Equipement (France) IRR announced: > 40% New Investor: Montagu PE (51%) Turn over 2005: 100 M€ New Investor: Loxam (100%) Turn over 2006: 124 M€ Astorg sold to Montagu Sebia, the world leader in clin- Ebitda 2005: 35-40% Two years after the secondary LBO, Barclays PE has Ebit 2006: 33 M€ A ical electrophoresis, a diagnostic technique in vitro to Astorg Partners: Thierry SERVICES EXIT, A sold Laho Equipement, n°3 in France for hiring out LBO 2, MEDICAL separate molecules. Astorg, who had taken over in Timsit; Montagu: Sylvain plant for the buildings, to Loxam, the leader on the national Barclays PE: Guillaume 2001, retain 16% alongside the management (20%). ICG, a Berger-Duquene, Quentin market. While the financier – which controlled a little more Jacqueau;T.Crob; G. Châtillon mezzanine and capital investor in 2001, also reinforced its posi- Bergoy than 55% alongside the management – had bought it for ADVISERS tion (13%). Founded in 1967 by Guy Barouh, this French group ADVISERS 110 million euros from Industri Kapital in March 2005, Laho EXITING INVESTORS (300 employees in 7 countries, nearly 100 millions in turnover) Equipement is sold for a total of 180 million euros. This is an F: Hawkpoint produces a specialised range of reactives (80%) and automa- EXITING INVESTORS estimated IRR of more than 40%. In two years, the compa- L: SJ Berwin; CMS BFL ta for biological analysis. It is building growth on innovation: F: Rothschild & Cie; L: Lovells; ny has improved its internal network by internal growth and after electrophoresis of proteins on cellulose acetate, and then A: PwC TS; T: Arthur D. Little acquisitions, growing from 90 agencies at the end of 2004 to NEW INVESTORS the electrophoresis of polyacrylamide jelly, it has been exploit- 119 at the end of 2006. Its turnover for the rental activities NEW INVESTORS F: BNP Paribas; ing capillary electrophoresis, using a very narrow tube with the has also noticeably improved, from 87 millions in 2004 to L: Lovells;White & Case advantages of speed and sensitivity. Well positionned for this L: Weil Gotshal; Landwell; 124 in 2006.The refocusing around rental alone has facilita- market, Sebia is counting on new clinical applications (for A: PwC TS; ted the significant improvement in Ebitda, which reached 33 example for diabetes), and its potential for international devel- T: Bain & Co; millions in 2006. With this acquisition from direct approach, opment, notably in Asia and Japan (second market).The trans- D: CIC; M: ICG; Loxam, wish to retain the brand name and the autonomy of action, valued at more than 400 million (225 million debt), L/D: Linklaters the Laho Equipement network, has made its market share has already produced a multiple of over 10 for Astorg. rise from 15% to 19% in France.

Vendor: Bridgepoint (63%), AlpInvest Vendors: 3i 34%), Europatweb, Alven Transaction value: 750 M€ Transaction value: 370 M€ Target: Médica (France) Multiple announced: > x3,5 Target: SeLoger.com (France) IRR announced: 132% New Investors: BC Partners, AXA PE Turn over 2006: 306 M€ New Investors: Market Turn over 2006: 37,6 M€ After cancelling its IPO, Medica was the object of a Ebitda 2006: 56 M€ On 1st December 3i achieved the IPO of SeLoger.com, 3i: Olivier Legal, Stanislas Cuny, Asecondary LBO with BC Partners (and AXA). This oper- Bridgepoint: V.Briançon,Valérie the French leader for real estate advertising on Inter- Julien Wagner EXIT, INTERNET EXIT, A ation for 750 millions brought a very satisfactory return to Texier,P.Collason, B. Bassi; net, 34% of which it held (for a 60 millions invest- ADVISERS Bridegpoint, which entered in July 2003 (for 330 millions). Since BC Partners: A. Françoi-Poncet, ment) since the LBO carried out in December 2005, with the then, Médica (a 306 million 2006 turnover,103 establishments, D.Villafranca, J-B.Wautier original VCs (Europatweb and Alven Capital) and Capzanine. EXITING INVESTORS

LBO 2, MEDICAL, HEALTH 8311 beds) has made itself the French leader in two sectors: ADVISERS This IPO on Eurolist was over-subscribed, bringing the intro- Listed sponsors: BNP houses for dependent old people and post care. Working on ductory share price to 22.50 euros per share, with a floated Paribas, UBS; local businesses for each institution, an information system EXITING INVESTORS value increased by almost 55%. In a year, SeLoger.com has L: Cleary Gottlieb;Weil Gotshal; about prospective customers, adaptable charges and reinvest- F: Lazard; L: Linklaters; A: carried out 2 build-ups (Dataleads and Pericles), improved its D: BNP Paribas, IKB, SG CIB; ment in the least efficient institutions, the occupation rate has KPMG TS; T: LEK Consulting team, and increased its turnover from a 24.6 to a 37.6 millions L/D: Simmons & Simmons risen from 90.6% after the heat wave to 95%. New perform- by developing its classified ads activity in the provinces. The ance indicators and accelerating external growth (with Aetas NEW INVESTORS IPO also facilitated the refinancing of the debt (80 millions) – in Italy) have generated an increased in the turnover (by 30%) F: ABN Amro CF; Rothschild & the mezzanine houses Capzanine and European Capital have and Ebitda (with debt increasing to more than 280 million after Cie; L: White & Case; Mayer announced 28% of IRR. At the end of March, when 3i sold the 2005 recap). Having already invested in this sector,BC Part- Brown; Landwell; A: PwC TS; its 7% remaining, the value had reached more than 37 euros! ners financed the deal with a debt close to 450 millions, and T: Arian Santé Social; D: RBS And the fund made more than 2,5 times its investment. intend to pursue the acquisitions policy. You can send us your exits by email to: [email protected]

| Special Issue | June 2007 | PRIVATE EQUITY MAGAZINE 41 042-042resto 29/05/07 11:44 Page 42

A BUSINESS RESTAURANTS

f TO GET ACQUAINTED f TO CLINCH A DEAL Le Soleil (The Sun) Les Ombres (Shadows)

From one kind of South to another! On the Italian Gildo’s old stamping ground, a kind On the upper slopes of the Musée des Arts Premiers, the terrace of sunshine which evokes everything that is most Provencal on the Rive Gauche which hewn out by Jean Nouvel, with the Eiffel Tower looking them in the seems oh so tweedy-Burberry. And if the boudoir style evoking cicadas and Provencal eye and the Paris skyline impinging onto their table cloth, the pub- characters is a bit over the top, in contrast the food really does evoke the lie of the lic just cannot get over it… After expecting a museum cafeteria, we land, Southern temperament and kindness of heart. Aïoli de bulots? Heady servings à find ourselves having lunch perched on the capital city’s eyelids. Sud- l’antiboise, with shell fish as warm and sensuous denly, as often happens with pie in the sky catering, the food seems to as you’ve ever tasted them and an aïoli bursting have a touch altitude sickness. Not bad at all but a bit too sensible, with flavour from every clove. The favouilles cowering under the parasol and intimidated by the surrounding. soup, thickened with bediane (Chinese anise). Should we complain? It’s not worth the trouble! Think about it, the The roast pigeon is alluringly pink with the food is not really what we’ve come for; it should accompany what’s giblets spread on croutons. Without forgetting going on, keep quiet, and not spoil the view. In this “don’t disturb” the chanterelle mushrooms fried up with supi- category, tuna fried with sesame seeds, lamb with poppy seed bread ons, the ever-smiling waitresses and a Corsican and vanilla Mille feuille pastry are more than adequate. canarelli in each glass to bring back the sun- shine. In short, just a few grams of real character LES OMBRES, Musée du Quai Branly (5th floor). 222, rue de l’Université, Paris 7è. spread over an area which is often too well con- Tel: 33 (1) 47 53 68 00. Open daily except Tuesday. A la carte menu: about 40 eu- trolled. Unfortunately that means several addi- ros at lunchtime, 60 euros in the evening. Wines: sound. Terrace: magical. tional euros on the bill. f SEDUCING THE MANAGEMENT LE SOLEIL. 153, rue de Grenelle, Paris 7è. Tel: 33 (1) 45 51 54 12. Closed on sunday. Sensing A la carte menu: around 40-60 euros. Wine: pleasant card turned towards South. On the mythical Dominique’s home ground, Guy Martin is propos- Metro: Ecole Militaire. Parking: Invalides. ing regime change at his Grand Véfour. A great grand chef doing a runner from his great restaurant to flirt with the zeitgeist is something we’ve got used to, but in spite of the naff logo and the designer decor Le Soleil without resonance, this time Martin has created subtle, elegantly crafted cuisine based on a short menu just for your appetite. His cuisine is inventive, sensitive, light without being fatuous, contem- R E S T A U R A N T S porary without being crass, technically accomplished without being academic (young mackerel with fennel in a delicate tart, magnificent A selection of the latest reviews of our favorite tuna with foie gras and artichokes, Anjou pigeon in Muscovado and iced turnip, grapefruit supreme on iced lemon shortbread). This is By Emmanuel Rubin business tables. glam gluttony, with cuisine as swanky as the high heels on the cloth.

f TO NEGOTIATE SENSING. 19, rue Bréa, Paris 6è. Tel: 33 (1) 43 27 08 80. Open every day except Satur- L’Orenoc day (lunch) and Sunday. A la carte menu: about 50- 60 euros. Snacks in the bar: about 15 euros. Lunch Claude Colliot at the Méridien, is a bit like lip- offer in a few weeks. No smoking anywhere in the stick on a stiff shirt collar, with its ad in Private restaurant. Wine also sold by the glass. Equity Magazine and the improbable encounter Parking: Montparnasse Raspail. between an inspired chef and what used to be a business style canteen. Suddenly, the very f WITH COLLEAGUES Paris-New York-Tokyo decor is reeling from remarkable cuisine which seems utterly sure of Sensing Rich its gestures and intuition. The pan of cep mush- L’Orenoc rooms in egg, fragrant with wisdom and This starts like an old-style thriller. A well hidden Paris courtyard, woodsmoke, lets you forget about the grossly traces of the 1930s all over the façade, with four stories of a former dia- thick carpet, the taste of totally irresistible white mond cutters’ bourse converted into a gaming centre. Between two onion ravioli trashes the excessively tasteful daggers we find a restaurant unfortunately named Rich. The gold plate lighting, the Dublin Bay prawns enlivened with sets the tone like a cellar for playing poker where you temper every- mango and Marjory put life into the tedious body’s appetite with some victuals as unimaginative as the imitation felt mahogany furniture and the “pop beetroot” carpet. Neo-standard cuisine with no frills, no pretensions or alarms, desert brings some soft exuberance into the air- distributing mint chicken nems, Aberdeen Angus cutlets, well fleshed conditioned atmosphere. A gutsy cuisine to side of calf, and macaroons with bitter caramel. For the “holdem confound the conformism of business dinners no’limit” (the initiates know what I mean), this is just what they need. comes over as a revelation and a half! As for everyone else, by a curious paradox this establishment is scrupu- lous about intimate relationships, and remains delicately discrete about L'ORENOC. 81, bd Gouvion Saint-Cyr, Paris 17è. distinction between pumpkin broth and walls in painted cloth. Tel: 33 (1) 40 68 30 40. About 70 euros for the à la carte menu. Lunch Menu 38 euros. Smokers’ area: yes, but RICH. 14, rue Cadet, Paris 9è. Tel: 33 (1) 48 01 87 87. Open every day. no cigar cellar. Wine: with the food and too little wine A la carte menu: About 50 euros. Set menu: 25 and 30 euros.

sold by the glass. Parking : Méridien-Etoile. DR Saloon available. Smoking and non smoking zones. Parking: Buffault.

42 PRIVATE EQUITY MAGAZINE | June 2007 | Special issue | PUBS 29/05/07 18:35 Page 8 PUBS 29/05/07 18:16 Page 6

Our values create value

Denis Metzger • Dominique du Peloux • Jérôme Kinas • Guillaume Planchon • Anne-Claire Boutant

Bertrand Rabiller • Stéphane Mulard • Jérémie Dyen • Thierry Béliard • Jérôme Lefèvre

CHEQUERS SA - 48 bis avenue Montaigne - 75008 Paris Téléphone : 01 53 57 61 00 - e-mail : [email protected]