Deal in Focus: Ekkio Capital exits Amatsigroup

Ekkio Capital has signed an exclusivity agreement with Eurofins, a provider of biopharmaceutical products testing focused on genomics, for the sale of Amatsigroup.

Founded by the GP in 2010 through the merger of four companies – Avogadro, Amatsi (then known as Crid Pharma), DBI and Avepharm – the group provides pre-clinical and clinical services for the development of human and veterinary drugs. It currently has 450 employees across 11 sites based in France, Belgium and the US.

In the current transaction, Amatsigroup is said to be valued at €130m, non-inclusive of its residual debt. Ekkio Capital (then known as Acto Capital) backed the company's management buyout in 2010 with an undisclosed capital injection. Originally an all-equity deal, the investment was later completed by a debt package provided by regional banks Credit Agricole, CIC, and Banque Populaire in order to finance bolt-on acquisitions.

The GP invested via the Acto Capital II fund, which closed on €90m in 2009 and typically invested €5-15m per transaction. The vehicle is now almost fully divested, with only two companies left in its portfolio. Meanwhile, Ekkio capital III, which was closed with €110m in commitments in January 2015, is around 70% deployed, according to the GP. Ekkio is thus likely to launch a new vehicle by year-end, unquote" understands.

At first, interest came mostly from private equity funds. But eventually, it was felt that Eurofins was the bidder that best grasped the business's inherent value, and its strong growth potential" – Thibaud Gachet, Ekkio Capital

According to Ekkio Capital partner Thibaud Gachet, Amatsigroup tripled in size during the GP's seven-year holding period, with turnover increasing from €20m in 2010 to €60m at present. "When we entered the business, all responsibilities were concentrated on the owner," says Gachet. "One of our first tasks was to recruit a proper sales team that could take on business development duties."

The GP subsequently supported the company's acquisitive growth strategy. Between 2010 and 2017, Amatsigroup completed a significant number of bolt-ons, which according to the GP accounted for around two thirds of its overall growth during the holding period. The remaining third is attributed to organic growth and product development. On average, the business grew at a steady 10% per year, Ekkio tells unquote".

Bolt-on acquisitions included Belgium-based businesses Seps Pharma in 2014, QBiologicals in 2016 and Bordeaux-based Disposable Lab in January 2017. Amatsigroup also became the owner of Pierre Fabre's pharmaceutical analysis laboratory in 2015, and of two Bertin Pharma sites earlier this year.

Flash sale
"By early 2017, the business had acquired a critical size that allowed us to consider the sale," says Gachet. In June, the GP appointed Rothschild to lead the sale process, which was closed in less than two months and "neatly accelerated between round one and two," he adds.

"At first, interest came mostly from private equity funds," says Gachet. "But eventually, it was felt that Eurofins was the bidder that best grasped the business's inherent value, and its strong growth potential." Funds competing in the race included Carlyle, as well as consortiums regrouping HLD and UI Gestion; and Gimv, Mérieux Développement and Keensight Capital.

According to Gachet, the market in which Amatsigroup is positioned is still "very atomised" at present, which should give the new owner abundant acquisition opportunities in the future. "There are plenty of small actors focusing on a single niche activity, but there isn't really one larger business presenting a global offer," he says.

The transaction is expected to be completed in the next few months.

Advisers
Vendor – Rothschild & Co, François de Breteuil, Robert Rozemulder, Eleonora Giorni (corporate finance); CMS Bureau Francis Lefebvre, Philippe Gosset, Vincent Delage (legal); Deloitte, Thomas Fischer (financial due diligence); Willkie Farr & Gallagher (legal).

People
Ekkio Capital – Thibaud Gachet (managing partner).
Amatsigroup – Alain Sainsot (managing director).
Eurofins – Gilles Martin (CEO).

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