IK acquires Bretèche Industrie from Equistone

Equistone had been the majority shareholder in Bretèche Industrie since 2013, when it acquired the business from Azulis and Unigrains.

Acquiring stakes from Equistone and management, IK is investing through the IK VIII Fund, closed on its €1.85bn hard-cap last year. IK VIII targets companies with an enterprise value of €100-500m based in France and the Benelux, DACH and Nordic regions.

According to unquote" sister publication Mergermarket, Equistone mandated Lazard in May this year to lead the sale, with final bids originally due on 28 July. The sale reportedly attracted around 10 potential sponsors at first. Other bidders that made it to the auction's second round included Bridgepoint and Sagard, according to the publication.

Industrial groups also shortlisted for the second round included German food processing technology supplier GEA and US-based industrial food equipment provider Peerless Machinery.

During Equistone's holding period, Bretèche Industrie developed new business lines and expanded into the pharmaceutical and cosmetics sectors. It also pursued an international growth strategy, acquiring two US-based businesses, including Shick in Q3 last year. In 2014, the company also bolted on German company IsernHäger.

The Nantes-based company's revenues grew from €165m in 2013 to €220m last year, while its workforce increased from 800 people to 1,000. The company projects revenues of €244m for the current year.

Bretèche's management team – which is reinvesting alongside IK – intends to focus on technological innovation, commercial development, and international growth through targeted acquisitions.

The transaction is still subject to regulatory approval and is expected to be closed shortly. Although its enterprise value has been reported to be around the €300m mark, representing an EBITDA multiple of around 9.5x, IK declined to confirm the precise value at this stage.

Previous funding
In 2013, Equistone bought a majority stake in Bretèche from Azulis Capital and Unigrains in a transaction valuing the company at €120m. Céréa Capital and Bretèche's management team invested alongside Equistone. LCL, CIC, Societe Generale, Palatine, Crédit Agricole and BNP Paribas provided a debt package to support the transaction, while Capzanine and Céréa Mezzanine contributed mezzanine financing.

Equistone drew equity from Equistone Partners Europe Fund IV, closed two months before the transaction with €1.5bn in commitments, according to unquote" data. Aforge Finance, Omnes Capital, Crédit Mutuel Océan and IPO, which in 1998 financed the group's acquisitions of France-based VMI and Germany-based Diosna, fully exited the company at the time.

Azulis acquired its majority stake in Bretèche in 2006 alongside Unigrains. LCL underwrote a senior debt package, while Céréa Gestion, Mezzanis and Idia provided mezzanine financing. 

Company
Founded in 1988, Bretèche designs, manufactures and installs industrial equipment for the food and consumer sectors. Bretèche specialises in equipment used for baking, dairy products, pharmaceuticals and cosmetics. It comprises six operating companies, including three focusing on bakery and specialist mixing: VMI, Estève and Diosna. The three others – Tecnal, Chalon Mégard and Simon – mostly focus on dairy products.

The group generated revenues of €220m in 2016 for a €32m EBITDA.

People
Equistone Partners Europe – Guillaume Jacqueau (managing director); Arnaud Thomas (partner); Grégoire Schlumberger (partner).
IK Investment Partners – Rémi Buttiaux, Dan Soudry (partner); Vincent Elriz, Guillaume Veber (investment managers); Mirko Jablonsky (director); Alexander Dokters (associate director); Daniel-Vito Günther (associate).
Bretèche Industrie – Didier Soumet (CEO).

Advisers
Equity – BNP Paribas CIB, Marc Walbaum, Sylvina Mayer (corporate finance); Willkie Farr & Gallagher, Edouardo Fernandez, Grégory de Saxcé, Paul Lombard (legal); EY, Laurent Majubert, Eric Roussel (financial due diligence); LEK Consulting, Serge Hovsepian, Maxime Julian (commercial due diligence).
Vendor – Lazard, Nicolas Constant, Jean-Philippe Bescond, François Guichot-Pérère (corporate finance); Paul Hastings, Olivier Deren, Sébastien Crépy (legal); Eight Advisory, Stéphane Vanbergue, Christophe Puissegur, François Gallizia (financial due diligence); Arthur D Little, Vincent Bamberger (commercial due diligence); ERM, Julie de Valence (environmental due diligence).
Company – Scotto & Associés, Nicolas Ménard-Durand (legal).

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• Topics
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• Equistone Partners Europe
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• Secondary buyout