Deal in focus: Ardian exit sparks third reshuffle for Novarc

Ardian and BPI France, joint owners of a 25% interest in industrial supplier Novarc since 2012, have organised a capital reshuffle that will lead to a full exit for Ardian and the re-entrance of BPI France alongside new investors Amundi PEF, Casra Capital and BNP Paribas Développement. These three newcomers are the private equity divisions of French banks and supported their takeover with a joint senior debt package.

The deal, which was announced on 18 November, sees Ardian fully exit its 18% stake, while BPI France, which held the other 7%, will also sell but re-acquire a larger holding. According to Alexis Guinard, investment director at BPI France's SME funding scheme France Investissement Croissance (FIC), the Novarc stake will leave the second fund of the FIC programme and be repurchased by the fifth; the asset will be the fifth portfolio company to be held by the latter vehicle.

Meanwhile, most of the remaining 75% of Novarc's capital will be kept by the company's founder and CEO Frédéric Croullet, followed by a symbolic stake held by the company's management team and workforce. Novarc's employees have been shareholders since Ardian opened the capital structure to its staff, a practice that has gained traction in France.

Founded in 1993, Novarc operates via two separate subsidiaries: ESP manufactures electrical safety equipment used by the power industry, while PSAI provides car maintenance products to automotive and industrial clients. The Malataverne-headquartered business expects to end 2015 with an operating margin above 12% from €115m in revenues; its current headcount sits at 600 employees.

The quarter-back and forth
According to unquote" data, this latest reshuffle of investors holding a quarter of Novarc's capital alongside the CEO's 75% is the third instance since the company's foundation.

In December 2006, EdRip deployed €10m via its mid-cap fund family Winch in return for a 25% stake in the business, then called Groupe Sibille. In June 2012, BPI France and Ardian were approached by EdRip and subsequently selected as new shareholders by the CEO as the company renamed to Novarc. Ardian drew equity from its €353m second expansion fund, which will hold three portfolio companies once Novarc has been exited, unquote" understands.

Earlier on in 2015, Ardian and BPI set up talks with Amundi, Casra and BNP Paribas as the duo looked to exit their stakes. As the new minority owners of Novarc, the three new investors will back the company's build-up plans alongside BPI France. Since foundation, the electricity safety specialist has carried out 20 bolt-ons, five of which have been sealed since Ardian and BPI France became shareholders in 2012.

Under their three-year ownership, Novarc switched headquarters, set up a new brand and grew to operate 14 sites in France. Put together, the changes have reportedly pushed up sales from €78m in 2011 to the €115m expected for 2015. The business now intends to continue adding businesses in new markets to break the €200m revenues mark by 2020.

People
BPI France – Nicolas Manardo, Alexis Guinard, Martin Lochon, Fabienne Gérard
Amundi PEF – Alexandre Flageul
Casra Capital – Jean-Yves Riowal
BNP Paribas Développement – Jean-Yves Riowal
Ardian – Arnaud Dufer, Alexis Lavaillote, Arthur de Salins
Novarc – Frédéric Croullet

Advisers
Equity – Eight Advisory,  (Financial due diligence); Renault Thominette Vignaud & Reeve (Legal).
Vendor – LL Berg (Legal).
Company – Paul Hastings (Legal).

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