Deal in Focus: Ardian to take majority stake in Prosol

In late March, Ardian agreed to acquire a majority stake in French group Prosol Gestion, better known as Grand Frais, which specialises in the distribution of fresh food products. Although the information was not confirmed by the investor, Prosol's enterprise value is rumoured to be well in excess of the €1bn mark. The transaction is expected to reach completion soon.

All previous investors – Sagard, Siparex, Carvest, Five Arrows and Abénex Capital – will stay on as minority shareholders, with Sagard and Siparex set to reinvest alongside Ardian. Members of the management team, led by Hervé Vallat, will also invest alongside founder Denis Dumont.

The transaction was supported by a €859m debt package, comprising a €759m B tranche provided by Crédit Agricole CIB, Natixis and BNP Paribas, and a €100m capex line.

For Ardian, the acquisition marks the sixth deal completed with Ardian LBO VI, which closed on €4.5bn last year with an extra €500m co-investment pocket for its LPs after only four months on the road.

Ardian, which said it had followed the company's progression for the past five years, had already come forward as a bidder during the 2016 sale process that eventually saw Sagard, Siparex and Carvest take a minority stake in the group. The GP, however, pulled out of the auction at the time.

The group significantly increased in size, having achieved in one year what it used to do over three. The founder therefore started considering bringing in a more significant partner that would help it enter the next stage of its development" – Mathieu Antonini, Ardian

Mathieu Antonini, a managing director of Ardian Mid-Cap Buyout, explains: "We had actually foreseen the sale as we had completed a strategic review of the business before negotiations even started. The talks had started with the owner looking for an external funder to provide a €120m minority equity ticket; however, over time, with currency trading improving and banks' appetite increasing, the company's need for equity decreased to €60m, which was no longer suitable for our vehicle."

In March 2016, Sagard, Siparex and Carvest therefore emerged as the winners of a competitive auction led by Natixis. Valued at around €700m, the deal involved the partial sale of a minority stake held by Abénex and Five Arrows, and allowed Dumont to increase his majority stake. Abénex and Five Arrows, which had entered the business in 2011, reinvested as part of the transaction.

Change of heart
While Dumont was previously keen to retain a majority stake in the business at the time of the buyout, Prosol's evolution and high growth over the last year made him reconsider his position. Says Antonini: "The group significantly increased in size, having achieved in one year what it used to do over three. The founder therefore started considering bringing in a more significant partner that would help it enter the next stage of its development."

An agreement between Ardian and the owner was reached quickly, according to Antonini, despite competition from other interested parties.

Founded in the Lyon region in 1992, the group manages the Grand Frais hypermarkets, located primarily on the outskirts of major cities and covering areas of 1,000m² on average. Each store supplies five different types of produce: fruit and vegetables, dairy, fish, meat and groceries.

Also known under its trading names Cerise and Potiron, the company owns a network of 185 shops across France, with 15-25 new locations opened over the last year alone. The Prosol Gestion entity, which also includes grocery specialist Calsun and butchery specialist Despi, represents an estimated €1.6bn in revenues at present.

People
Ardian – Mathieu Antonini (managing director mid-cap buyout); Nicolas Darnaud, Alexandra Goltsova (senior investment managers); Manon Massoni (analyst); Daniel Setton (director).

Advisers
Equity – CA-CIB, Pietro Sibille, Stéphane Barret, Laura Mendez Rodriguez (corporate finance); DLA Piper, Michel Frieh, Julia Elkael, Arnaud Lafarge, Guillaume Valois, Emilie Renaud, Edouars Sarrazin, Fayrouze Masmi-Dazi (legal, tax); Latham & Watkins, Xavier Farde, Lionel Dechmann (legal); Siaci (insurance due diligence); Roland Berger, Olivier de Panafieu (commercial due diligence); 8 Advisory, Christian Berling (financial due diligence).
Company – Natixis Partners, Jean-Baptiste Marchand, Benjamin Giner, Thomas d'Espois (corporate finance); Ayache Salama, Bernard Ayache, Sandrine Benaroya, David Ayache (legal); Ixa, Sylvain Lagneaux (legal); LL Berg, Nathalie Jacquart (legal).
Debt – Gide Loyrette Nouel, Eric Cartier-Million (legal).

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