
Deal in Focus: Omnes exits Sateco after nine years
After a nine-year holding period, Omnes Capital made the decision to divest industrial group Sateco, an investment challenged by tough conditions in the French public building and works sector. Alice Tchernookova reports
In early June, Omnes exited safety platform and metallic formwork specialist Sateco, selling its stake to Naxicap Partners. The deal, valued within the €50-100m range, generated a 2x return for the GP.
"It was a cyclical investment in a cyclical sector," Omnes partner Philippe Zurawski says, describing challenging market conditions during the holding period. "As soon as customers see their order book get thinner, they stop investing in new equipment and ordering from us; they follow market trends too."
Sateco registered relatively high turnovers at the time of the acquisition in 2007, Zurawski recalls, usually around €50-55m or nearing €60m at best. But the 2008 crisis took its toll on the sector and on the company's performance. Indeed, according to data gathered by French body Observatoire des Métiers du BTP (Public Building and Works Sector Observatory), activity dropped by an overall 8% in 2009.
As a consequence, Sateco saw its turnover fall from €50-55m in 2007 to €31m in 2009. "We were the victims of a cycle," Zurawski says. Despite this dramatic slide, the GP managed to keep the business afloat, and furthermore was able to bring revenues up to the current €40m.
Turnaround
On top of reinvesting in existing products, a strong focus was placed on innovation and the development of new ranges. During the nine-year investment period, around 100 patents were registered, the GP says. All existing product ranges were renewed, and two new ones were launched.
Omnes also made changes to management. The performance of the management team in place was evaluated, leading to the hiring of a new industrial director and a new sales director.
Furthermore, in late 2012, early 2013, the GP hired external consulting firm Fontenay in order to re-engineer the company's factory and modernise production processes.
Finally, a focused review of existing and prospective clients' needs was carried out with the help of strategy consulting firm Estin&Co, identifying and further developing key production areas.
Together, these elements led to the GP's success in putting Sateco back on its feet after an unstable period, and in developing an attractive offer. "Although activity in the sector was globally slowing down, we still managed to acquire big clients, such as parking manager Vinci, and increase our presence on the market. So in a sense, we got affected by the crisis to a lesser extent," Zurawski says.
"As of H2 2015, activity in the sector started picking up again in France," says Zurawski. "At Sateco, we felt a strong acceleration from September onwards – our customers' situation had improved significantly, and we had acquired a lot more clients."
During the three previous years, monthly orders typically reached €5-6m a month, according to the GP. In September, they rose to €10m, before reaching a high of €14m in February 2016. "Since June-July 2015, we have been achieving super performances," says Zurawski. "We knew we had reached the end of a cycle, and it was time to make a move."
Flash sale
Once the decision was made to exit the group, the process was fast, without the need of a formal auction process, as Omnes had already selected a buyer.
In mid-2015, Omnes contacted various funds and investment banks, informing them of their pending exit. "If the deal had not been stricken with Naxicap, we would have formally launched the process around April or May 2016," says Zurawski.
However, Naxicap preempted the deal before the sale was officially launched, cutting the process short. Two or three other candidates were also in the race at that point, the GP adds without revealing names.
People
Omnes Capital – Philippe Zurawski (partner); Mikael Schaller (principal).
Naxicap Partners – Luc Bertholat (partner); Cyriaque Viaud (senior associate).
Advisers
Equity – PwC, Guillaume Morineaux, Jacques Darbois (legal, tax, environmental due diligence); Oderis, Aurelien Vion (financial due diligence); Indefi, Julien Berger (commercial due diligence); CVS, Matthieu Guignard (legal).
Vendor – Lincoln International, Ludovic Rodie, Serge Paleau (M&A); King & Wood Mallesons, Jerome Jouhanneaud, Remi Pages (legal); OC&C Strategy Consultants, Henri-Pierre Vacher (commercial due diligence); PwC, Dider Sidois, Antoine Fustier (financial due diligence).
Debt – Hogan Lovells, Sabine Bironneau (legal).
Management – Delaby & Dorison, Emmanuel Delaby; Cabinet BGB, Alexandre Gaudin (legal).
Latest News
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Sponsor acquired the public software group in July 2017 via the same-year vintage Partners Group Global Value 2017
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Czech Republic-headquartered family office is targeting DACH and CEE region deals
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Ex-Rocket Internet leader Bettina Curtze joins Swiss VC firm as partner and CFO
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Estonia-registered VC could bolster LP base with fresh capital from funds-of-funds or pension funds