French mid-cap: AtriA merges with Naxicap

Greg Gille
09 December 2011

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Troubled French mid-cap GP AtriA Capital Partenaires has merged with counterpart Naxicap.

AtriA will still operate under its own name, and will keep managing the AtriA II and Atria III vehicles. AtriA III, which closed on €300m in 2006, will not make further investments - it has invested €200m across seven companies overall. That said, the firm doesn't exclude raising a new vehicle later down the line if institutional investors show enough appetite.

AtriA's five-strong team will be assisted by Naxicap, and founder Dominique Oger will remain as CEO. The merger has been approved by AtriA's LPs, which comprise institutional investors and a club of around 50 businessmen. An executive committee comprising Oger as well as Eric Aveillan and Paul Moutinho - respectively chairman and member of Naxicap's board - will be put in place.

The firm started looking for a potential suitor shortly before the summer, and was assisted in the process by DC Advisory. "We were looking for AtriA to partner with another structure in order to build a major actor in the French mid-cap space and potentially raise a new vehicle, rather than just manage its historical portfolio," founder Dominique Oger told unquote". "A partnership with Naxicap was particularly attractive, as there is a strong strategic angle in addition to the purely financial aspects of the transaction."

Meanwhile Naxicap, which is part of the Natixis group, saw the deal as an opportunity to further break away from its captive status: "Naxicap is mainly managing funds on behalf of the BPCE banking group at the moment," explains Naxicap chairman Eric Aveillan. "We are increasingly looking to manage more third-party funds and partnering with AtriA is part of that ongoing strategy. Besides, this will strengthen our mid-cap position in France as the enlarged structure will be managing €1.2bn in total."

AtriA, which was founded in 2000 and has €300m worth of assets under management, has been struggling with succession issues this year.

Partners Edouard Thomazeau and Thibaut de Chassey resigned from AtriA in April, triggering a key-man clause on the firms' third vehicle. The two partners left the firm together and stated the departure was motivated by "strategic divergence". They have since then founded their own fund manager, Atlon Capital Partners.

The move triggered a key-man clause on Atria's third vehicle. It has since then not been able to make new investments. Oger however stated that the fund's performance shouldn't be drastically impacted: "AtriA III's portfolio is performing well, and we expect the fund to return cost plus hurdle to investors following the divestment period."

Prior to striking a deal with Naxicap, AtriA had reportedly been in talks with Duke Street but this fell through in September. Talks had been at an advanced stage and financial terms for the merger seem to have been the main point of contention, French daily Les Echos reported at the time.