Sagard picks up Alvest in tertiary buyout

The deal is understood to value Alvest at between €250-300m, according to a source close to the situation. It is expected to be finalised in June, pending the approval of the relevant authorities.

Sagard was already familiar with Alvest, having been involved in the auction process at the time of the 2012 buyout, and had been actively tracking the company's progress ever since. In addition, Alvest CEO Jean-Marie Fulconis had held a seat on the board of Sagard portfolio company Souriau in the late 2000s.

The GP therefore approached LBO France directly at the end of last year with a pre-emptive offer. The vendor consulted the management team and all parties decided to go ahead with a deal, which was agreed upon following eight weeks of negotiations.

Sagard and Alvest's management intend to pursue the group's existing strategy of targeting emerging markets, but will also increase the ongoing efforts to penetrate the military equipment market – Alvest notably works with the US military.

Significant investments in R&D will also continue to be a feature of the group's strategy. The company's Taxibot project was of particular interest to Sagard: the electric aircraft tractor is designed to tow planes when taxiing, significantly reducing noise and air pollution around airports. Taxibot is currently being trialled by Lufthansa at Frankfurt Airport.

Previous funding
Alvest will now be backed by a private equity owner for the third time in the space of nine years. Ardian first took Alvest (then TLD Group) private for €90m in 2006. Calyon underwrote the senior debt package, while Indigo provided mezzanine financing. Equistone (then Barclays Private Equity) was invited to take a minority shareholding in the transaction.

Following the buyout, the group expanded through the acquisition of Sage Parts and saw its turnover more than double, reaching €300m in 2012. Headcount also increased significantly – from 800 to 1,350.

LBO France picked up the asset in late 2012 – being the management's first choice over a US-based private equity fund in the auction, according to the GP. Alvest kept to its growth trajectory in the following years – the group now employs 1,500 staff and generates revenues of €350m, having expanded across emerging markets since the LBO France-led buyout, with two-thirds of turnover currently generated in these countries. The revenue growth over the 2012-15 period was generated organically.

LBO France also helped Alvest deal with production issues in the US, as the company was struggling to meet higher levels of demand. The GP put its operational team to work in helping Alvest's US division deal with the production bottlenecks, according to LBO France.

Debt
Societe Generale, BNP Paribas, KBC and CIC coordinated a debt package to finance the acquisition. This comprises a €135m senior debt package (with 75% of tranche B and 25% of tranche A), as well as €40m in capex and revolving credit facilities. Leverage amounts to slightly less than 4x EBITDA.

Company
Operating through its TLD and Sage Parts subsidiaries, Alvest specialises in ground support equipment for airports. The group also produces and markets high-tech adhesive films used for aeronautical applications.

The group operates nine factories in the US, Canada, France and China, which serve customers in 150 countries.

TLD was formally established in 1951 but has roots that date back to the 1860s.

People
Frédéric Stolar, Rik Battey, Bérangère Barbe and Jean Labro worked on the deal for Sagard. LBO France was represented by Robert Daussun, Jérôme Guez, Gilles Taldu and Jacques Franchi.

Advisers
Equity – Weil, David Aknin, Guillaume Bonnard, Paul Leroy, Gautier Elies, James Clarke, Luc Bontoux, Romain Ferla, Flora Pitti-Ferrandi, Anne-Sophie Dalet, Ted Posner, Vadim Brusser, Alexis Brown-Reilly (Legal); CMS BFL, Dimitri Leboff, Florian Burnat, Sophie Mahy (Tax); Banque Hottinguer, Philippe Bassouls, Bernard Le Gendre (Debt advisory); Arthur D. Little, Mathieu Blondel (Commercial due diligence); KPMG, Axel Rébaudières, Jad Barakat (Financial due diligence); Aecom, Joël Ferrus (Environmental due diligence); Cavaro, Christian Mergier (Insurance due diligence).
Vendors – Mayer Brown, Xavier Jaspar (Legal).
Management - Banque Hottinguer, Pierre Durand de Bousingen, Xavier Maître (Corporate finance); Hoche, Jean-Luc Blein, Quentin Fournier, Charlotte Fortin, Audrey Magny, Amandine Doury (Legal).
Debt – De Pardieu Brocas Maffei, Christophe Gaillard (Legal).

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• Topics
• France
• Buyouts
• Industrials
• Exits
• Sagard Private Equity
• LBO France
• Secondary buyout
• France
• Unq2015May