Crédit Mutuel Equity boosts German deal hunt with new appointments

The Strasbourg-headquartered firm, which manages around EUR 3.8bn in assets mostly through minority investments, has hired Petar Marinov as senior principal. He joins from Commerzbank, where he was managing director and team head for M&A execution.

Zoya Backhaus has been appointed as senior associate, joining from EY’s strategy and transactions division, where she focused on financial due diligence.

Zoya Backhaus, Crédit Mutuel Equity

 

 

 

 

 

 

 

 

 

The appointments coincide with the firm’s creation of an industry advisory group, which will help originate new deals, bolt-on acquisitions and other strategic advisory to its German portfolio companies. The group’s appointments are Martin Giersch, former CEO of VOSS Fluid and division manager and member of the management of Weber-Hydraulik; Olaf Pehmöller, former CEO of ProXES Group and Stephan Machinery; and Frank Walser, former Group CFO, managing partner and shareholder of the Pfeifer & Langen Group and group CFO of the Werhahn Mühlen Group and finance director of the Warsteiner Brewery Group

“Germany is the focus for internationalisation for the Crédit Mutuel Group,” Neiss said. “Germany is already the second market for our banking group. And we intend to replicate this for Crédit Mutuel Equity.”

Around “several hundred million euros” is earmarked for investments in Germany, as well as the wider DACH region, he said.

The move is part of CME’s plans to broaden its investments geographically, he said, noting the group’s target to have 20% of the fund’s exposure in non-French companies over the coming years. Germany should be the largest benefactor in this diversification move, he added.

“We see opportunities from the very large number of family-owned mid-sized companies with established technologies and innovation, as well as strong market positions in Europe and worldwide,” he said. “Such companies face challenges and opportunities of all sorts, which a professional financial investor can help with through professionalisation and growth.”

Currently, around 10-15% of the group’s portfolio companies are companies based outside France, namely Switzerland, Belgium, Germany, Austria, Luxembourg, as well as Canada and the United States, he noted. In Germany, CME has made eight investments and one divestment since its Frankfurt office was established in 2018.

Although a generalist at heart, CME is particularly active in the food sector internationally, Neiss said. Its experience in the sector should play well in Germany, given that the sector remains dominated by family-owned businesses without much private equity penetration, he said.

Within industrials, it will look at companies that play to the themes of automation, robotisation and energy efficiency, among others. The firm also has experience in healthcare and business service companies, he added.

CME can provide equity tickets ranging from EUR 5m-50m for profitable companies with sales of around EUR 20m to more than several hundred million euros, he said.

Origination efforts
The new appointments will compliment CME’s use of M&A advisers to help build up its pipeline both in minority and majority stakes, Neiss said.

As CME has traditionally mostly focused on minority investing, the new appointments will help bring some of its origination work in-house, making up for the fact that the work of many existing advisory houses is mainly focused on buyout deals, he said.

In cases where CME is involved in time sensitive auction processes, Neiss emphasised the importance for the firm to spend sufficient time to understand the management and shareholders of the targets. This is particularly important to minority investors, who will be working with the management over the long term, as opposed to buyouts which can change the management team after a deal, he added.

“Minorities need to be built on trust between the partners even more so than buyout transactions who end up in controlling positions,” he said. “It’s sometimes difficult to stay in the most competitive processes.”

CME has an edge in primary deals, where sellers are more open to keeping a majority stake and are keen to stay on and continue the development of the company, Neiss said.

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• Topics
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• DACH
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• Credit Mutuel Equity (ex CM-CIC Investissement)