Deal in Focus: Naxicap acquires Texa from Apax

Alice Tchernookova
12 August 2016

Tweet
Facebook
LinkedIn
Google plus
Send to

Apax France has sold French loss adjustment group Texa to Naxicap, putting an end to a four-year holding period. Alice Tchernookova reports

The deal comes after a streak of bolt-on acquisitions supported by Apax in the last couple of years, which over time contributed to strengthening the group's position in the sector.

The original transaction in 2012 saw Apax acquire a majority stake amounting to an estimated 70% in a quaternary buyout in which founder Christian de Belair retained 11%, previous holder Pragma Capital held on to a 10% stake, while the balance went to management. This marked the first time the company had been majority owned by a private equity house.

The investment in the loss adjustment group was largely handled by Apax partner Monique Cohen, who had been in touch with the founder prior to the deal. "Back in 2012, Christian de Belair explained to me that he was ready to become a minority shareholder in the company, while until then he had always wished to stay in control," she tells unquote".

With the GP's backing, Texa doubled its sales, recording a 45% increase in turnover between 2014 and 2015. Over the holding period, the group registered an overall 60% growth rate, increasing its turnover to €181.6m last year.

There were two possible courses of action for us: we could either exit the business, or stay in and keep growing it. However, that second possibility was synonymous with an extra three-year commitment" - Monique Cohen, Apax France

During the investment period, Apax diversified the group's activities, opening it up to the construction insurance sector, and developing the compensation-in-kind and claims management segments.

Build-up transactions were thus made in that direction, with the acquisition of three different businesses between 2013 and 2015: compensation-in-kind specialist Geop, construction insurance expert Eurisk, and Cle Group, a loss adjuster in the construction sector.

These acquisitions, paired with an accelerated digitalisation pushed by the GP - with the additions of online property diagnostic service AlloDiagnostic and video loss adjustment service Visiotex - rapidly caught the attention of fellow private equity firms, according to Cohen. The next logical step would have been to make Texa a global business, but Apax preferred passing it on to the next owner.

"Several firms contacted us to let us know they were interested by the business and the dimension it had taken," Cohen says. "From then on, there were two possible courses of action for us: we could either exit the business, or stay in and keep growing it. However, that second possibility was synonymous with an extra three-year commitment."

Clinching the deal
Cohen describes a "very accelerated sale", with five interested bidding firms. With the "best price, best management, and a stimulating vision of the company's future," Naxicap Partners secured a winning offer, she says.

The deal - believed to be worth in the region of €200m, unquote" understands - sees the new investor take a stake similar to that of Apax four years ago (70%), with Pragma Capital fully exiting the group and the CEO and management reinvesting alongside the new GP.

The transaction also includes senior debt, divided in two tranches and provided jointly by CIC, Bank of Ireland and LCL. Furthermore, Texa will benefit from a line of credit dedicated to external growth, as well as from a revolving credit facility.

Apax did not disclose returns on its investment. The valuation of the business in this transaction however, which has almost doubled in comparison with the 2012 deal (€110m), is a good indication of the GP's performance. "Making our minimum return was part of our conditions; as soon we had made it, we agreed to sell," Cohen adds.

Texa is expected to keep on growing with acquisitions - most likely outside of France - and developing its activity across its various segments.

People
Apax France – Monique Cohen (partner).
Naxicap Partners – Eric Aveillan (chairperson).

Advisers
Equity – Edge Avocats, Matthieu Lochardet, Claire Baufine-Ducrocq (legal); Arsène Taxand, Laurent Partouche (tax); Neovian Partners, Patrick Richer (commercial due diligence); Accuracy, Xavier Gallais, Florence Westermann (financial due diligence); Delaby & Dorison, Emmanuel Delaby, Florian Tumoine, Alexandre Gaudin, Virginie Couvrat (legal); Canaccord Genuity, Nadim Barouki,Nicolas Royer, Thierry Auzel (M&A).
Vendor – Natixis Partners, Patrick Maurel, Valérie Pellereau, Christophe Muyard, Emilie Petit, Louise Bernard (M&A); Clifford Chance, Gilles Lebreton, Anna Velitchkova, Raphaël Durand, Patrick Hubert, Thierry Arachtingi, Chloé Desreumaux, Britta Hardeck (legal, tax); BCG, Marc Becker, Gilles Fabres (commercial due diligence); EY, Stephane Seguin, Jean-François Nadaud, Guilhem de Montmarin (financial due diligence).
Debt – Simmons & Simmons (legal).