PAI, Sagard to exit Kiloutou in €1.5bn deal

A spokesperson for HLD confimed the deal values Kiloutou in the region of €1.5bn (7.5x EBITDA). The deal was backed by a €800-850m senior term loan B debt.  

This would mark the second buyout in a row in which Kiloutou was the target of a preemptive offer, as PAI bought the business from Sagard in a €535m bilateral transaction in 2011. Sagard reinvested as part of that earlier deal and will now exit the business alongside PAI. 

HLD is an investment holding founded and backed by a number of successful French entrepreneurs. HLDI is another industrial investment company controlled by Dentressangle Initiatives, the holding of the Dentressangle family, and co-run by the HLD team.

Kiloutou's management team and around 1,400 members of staff will reinvest alongside the new owners.

Previous funding
Sagard backed the €170m buyout of Kiloutou in 2005 to obtain a 51% shareholding from company founder Franky Mulliez. Societe Generale and Crédit Agricole were joint arrangers of the banking syndicate, which underwrote debt facilities for the transaction. Leverage represented 60% of the deal value.

Under Sagard's ownership, Kiloutou opened 126 new agencies and reinvested significant cashflow in the purchase of new equipment.

PAI then acquired Kiloutou from Sagard in 2011 in a deal that valued the business at €535m (7x EBITDA). The debt arranged in 2011 by PAI amouted to 3.5x EBITDA. Sagard and other existing shareholders reinvested alongside the new owner; 450 of the company's staff also secured a stake in the business. PAI, which invested via PAI Europe V, made a preemptive offer to bypass the auction process. 

During PAI's ownership, Kiloutou opened facilities in Poland, Spain, Germany and Italy, and made 25 acquisitions, of which 10 were in France.

Company
Founded in 1980, Lille-based Kiloutou specialises in the short-term renting of construction equipment for building professionals and public works.

At the time of the 2011 buyout, Kiloutou employed more than 2,000 staff in 283 branches across France, with a €292m turnover and €76m in EBITDA. When Sagard bought the business in 2005, those figures stood at €188m and €43m respectively.

Kiloutou is now expected to post a €700m turnover with EBITDA in the region of €200m. It now employs 4,300 staff across 500 agencies in France, Poland, Spain, Italy and Germany.

People
PAI Partners – Nicolas Holzman (partner).
Sagard – Antoine Ernoult-Dairaine (partner).
HLD – Jean-Bernard Lafonta (partner).

Advisers
Vendors – Lazard (M&A); Morgan Stanley (M&A).

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