LBO France to acquire RG Safety

Alice Tchernookova
21 July 2017

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LBO France has entered exclusive negotiations to acquire personal protection provider RG Safety from Abénex Capital.

Abénex will fully exit RG through the transaction, with LBO France becoming the new majority owner.

LBO France is currently investing from the White Knight IX fund, closed with €450m in commitments earlier this year but originally launched in 2013 with a target of €1-1.5bn.

According to French financial publication Capital Finance, the transaction values RG at €145m, representing 10x EBITDA.

Last year, RG benefited from a €50m refinancing package provided by existing lenders. As part of the transaction, the business renewed both senior and mezzanine facilities, which had been put in place with the original deal in 2012.

The new debt package, representing a 3.5x EBITDA multiple, was primarily composed of €50m in transferable senior debt provided by banks already lending to the group – LCL, BNP Paribas, Societe Generale – and by new lenders Crédit Agricole Centre Est and debt fund Artemid. The refinancing was mainly aimed at enabling RG to carry on with external acquisitions.

During Abénex's holding period, RG's turnover increased from €156m to €180m. Last year alone, the company's sales grew by 17%, mainly as a result from the acquisition of Italian A+A Monferrato. RG Safety's international transactions currently account for 20% of its sales.

With LBO France's support, RG will now focus on three main aspects to pursue its growth: developing new products; developing a more direct access to local clients and improving assistance to international customers; completing targeted acquisitions across Europe.

*Update: on 26 July 2017, LBO France and Abénex announced they had signed an exclusivity agreement. The transaction remained subject to regulatory approval and to consultation with RG's employees.

Debt
CM-CIC Private Debt provided a unitranche debt package to support the transaction.

Previous funding
In March 2013, Abénex acquired RG from industrial holding Salvepar, taking a majority stake in a deal valued between €100-250m. At that time, Salvepar held 19.8% of RG, worth €8.9m.

Company
Founded in 1987 by Bernard Gicquel, RG emerged following the merger of four personal protection equipment specialists – Amiet, Fiprotec, Cévenole de Protection and Gérin – and specialises in the production of protection equipment used by industrial workers. Clients include large corporations, SMEs from the industrial and services sectors, and public sector companies.

Based in Saint Priest near Lyon, RG has a network of 27 branches, 20 of which are France-based. It is also active in Germany, Switzerland, Belgium and Slovakia through various subsidiaries, with international operations representing around 20% of its sales. In addition, RG distributes products through its own brand, Ergos, which accounts for 30% of its revenues.

Currently led by CEO Pierre Manchini, RG has 35,000 products in its catalogue, and covers six main protection fields: head, hand, foot, body, breathing, hygiene and safety in the working environment. The company generated €180m in revenues in 2016 and employed 430 people.

People
Abénex Capital – Johann Dupont (partner); Matthieu Balaÿ (associate).
LBO France – Jérôme Guez (partner); Simon Couturier (investment manager); Gilles Taldu (head of operating team).

Advisers
Equity – Advention Business Partners, Alban Neveux (financial due diligence); Mayer Brown, Emily Pennec, Xavier Jaspar et Laurent Borey, Xavier Jaspar (legal); Advention, Alban Neveux (commercial due diligence); Deloitte, Frédérique Chenevoy (financial due diligence).
Vendor – Transaction R, Pierre Sader, Benjamin Osdoit, Guillaume Marquet de Vasselot, Cyril Petit, Mathile Paoli (M&A, corporate finance); DLA Piper, ichel Frieh, Matthieu Lampel, Anaïs Vidal, Jérôme Halphen, Eva Amor, Guillaume Valois, Emilie Renaud (legal, tax, environmental due diligence); Deloitte, Eric Boucharlat, Thomas Gorguis, Kevin Profit et Noémie Picaud (financial due diligence); Indefi, Julien Berger, Charles-Antoine Dreyfus (commercial due diligence).
Company – Canaccord Genuity, Nadim Barouki, Nicolas Royer (corporate finance); Delaby & Dorison (legal).