Bain's Parts Holding Europe files for IPO

The draft registration document has been approved by the French financial authority, the company said in a statement.

PHE said in the statement that the purpose of its planned IPO is to continue to gain market share and diversify its offering in Europe. The company could undertake a €450m capital raise in conjunction with the IPO. It also aims to reduce its net leverage to less than 3x for 2021 and less than 2.5x for 2022.

Unquote sister publication Mergermarket reported in February 2020 that Bain was again exploring an IPO for PHE, having first attempted to float the company in May 2018, citing a "cautious" market environment for the halt to its plans. Press reports from the time stated that the company was expected to be valued at around €1.2bn, equating to 12x the €100m in EBITDA it was forecast to generate in 2018.

Bain also explored options for exiting the company in 2019, Mergermarket reported, hiring Rothschild for a process that marketed the company based on EBITDA of €150m for 2019.

Founded in 1962 and headquartered in Arcueil, PHE runs a network of B2B and B2C car parts distributors in France, Italy, Spain and Benelux, operating under the brand name Autodistribution, as well as under the Oscaro brand for online sales.

The company said in a statement that acquisitions made in recent years have expanded its position in the European market, as well as in the online sales space via the acquisition of Oscaro in 2018.

PHE said in a statement that it believes that the spare parts market will continue to grow due to a large and increasing portion of aging installed parts in the market, even though new car sales are more cyclical.

PHE has had private equity backing since 1999, when a consortium of investors including Ardian and Gilde acquired a minority stake in the business from its parent company, Strafor Facom, via an MBO. The deal valued the company at around €503m (FRF 3.3bn), according to Unquote Data.

In 2000, Goldman Sachs took control of a majority stake in the business as part of a debt-for-equity swap. Gilde and Qualium Investissement sold their stakes in the business in 2004.

In 2006, Investcorp acquired PHE (then known as Autodistribution) via its Autodis newco, with debt backing from Citigroup and LGT Capital Partners. The deal was valued in the €600-800m region, according to Unquote Data.

Towerbrook Capital Partners announced in March 2009 that it was to acquire a 62.5% stake in PHE. The deal was structured after the company breached its covenants in June 2008 and saw Investcorp reinvest in the structure, taking a 16% stake. The deal included a €110m equity injection, with an additional €50m available. Towerbrook also offered a 21.5% equity stake in the company to its lenders, in return for the reduction of PHE's debt.

Bain acquired PHE in 2015 in an SBO from Towerbrook and Investcorp. The deal valued the company at €615m, equating to an entry multiple of around 9x its 2014 EBITDA.

At the time of Bain's investment, the company posted revenues of €1.17bn and EBITDA of €68.1m. The company generated 2020 revenues of €1.8bn and EBITDA of €204m. PHE said in a statement that these figures corresponded to revenue growth of 20.2% and EBITDA growth of 58.9% since 2018, although it said in a statement issued in September 2020 that Covid-19 had impacted its performance, meaning that it posted H1 2020 EBITDA of €58.7m, compared with €69.7m in H1 2019. The company generated revenues of €822.7m in H1 2020, versus €899m in H1 2019.

PHE expects to post Q1 2021 revenues of €489m and Q1 2021 EBITDA of €57m.

According to Unquote Data, France saw no PE-backed IPOs in 2020 and has seen 12 such exits in the past five years. The most recent PE-backed IPO in France was Apollo and BPI France's €3.2bn flotation of glass packaging manufacturer Verallia in October 2019. The second largest PE-backed IPO in recent years in France was electrical and mechanical engineering business SPIE, which listed in May 2015 with a market capitalisation of €2.5bn.

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