BPI France, Arkéa Capital et al. exit Quadran

Direct Energie, France's third largest electricity and gas provider with €1.69bn in annual revenues and 19.8 TWh of energy delivered in 2016, has entered into exclusive negotiations to wholly acquire Quadran.

The renewable energy provider was backed by BPI France, Arkéa Capital Investissement, Demeter Partners, Soridec and UI Gestion, which together held an estimated 25% stake since 2015 through the holding Lucia Holding.

The scope of the transaction includes all of Quadran's on-shore wind power activities, solar, hydro-electric and biogas activities in France.

The €303m acquisition price is combined with an earn-out of a maximum amount of €113m that will depend on Quadran's project commissioning between now and mid-2019. The earn out could be paid up to €75m through the issue of new Direct Energie shares, the acquirer said, at a price equal to the average price of €49.2 apiece observed during the 20 trading days that preceded the announcement.

Quadran is projecting an EBITDA of around €40m in 2017, up to €60m in 2018 and €100m in 2019. Its net financial debt represented around €265m as of 31 December 2016.

To finance the acquisition, Direct Energie has already secured a range of underwritten facilities with BNP Paribas that will finance all of its commitments. The company also plans to launch a capital increase of approximately €100m, whose terms will be defined at a later stage, it said in a statement.

The deal should be completed by the end of 2017.

Previous funding
In 2015, Quadran raised €45m from BPI France, Arkéa and existing backers Demeter, Soridec and UI Gestion. The backers' combined stake was estimated to represent around 25%. The round was led by BPI France, which injected €25m of the total €45m, followed by Arkéa's €5m equity ticket. At the time, Quadran employed a workforce of 185 people, and generated €75m in revenues.

In 2014, Tikehau provided Quadran with €30m of funding in convertible bonds.

Prior to joining forces in 2013, JMG Énergie and Aérowatt (whose merger resulted in Quadran) had been backed by private equity houses. In August 2006, Demeter led a €4m series-B for Aérowatt alongside Crédit Agricole's environment fund Capénergie, CM-CIC Capital Privé and Viveris Management. The consortium secured a combined 85% stake in the business. Two years later, Demeter was again the leader of a round for JMB Énergie, together with IRPAC and Soridec – put together, the investors came to control a 17% shareholding, according to unquote" data. A merger scenario began to be considered by the managers of both companies in 2010. The first move was made by JMB, which acquired 60% of Aérowatt’s shares in September 2012, followed by a takeover bid for the company’s non-listed shares the year after, resulting in its delisting.

Company
Created via the merger of private-equity-backed companies Aérowatt and JMB in 2013, Quadran constructs and maintains renewable facilities including wind, solar, hydropower and biogas energy production plants. Its 220 power plants generate around 620 MW, and around 1,250 GWh is provided to more than 1.06 million users each year.

With headquarters in Villeneuve-les-Béziers, Quadran operates a total of 20 agencies in continental France and overseas territories. The business projects revenues of €300m for 2017 and employs 270 people.

People
BPI France – José Gonzalo (director, mid- and large-cap investments); Anne-Sophie Herelle (investment director); Clément Combal (investment manager); Stéphane Boivert (analyst); Sophie Paquin (legal director).
Arkéa Capital Investissement – Cyril Miller (director).
Quadran – Jean-Marc Bouchet (CEO).
Direct Energie – Xavier Caïtucoli (CEO/chair).

Advisers
Acquirer – Messier Maris & Associés (M&A); BNP Paribas CIB (corporate finance).

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