Charterhouse acquires Funecap

Francesca Veronesi
03 August 2018

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Charterhouse Capital Partners has acquired Funecap Groupe, investing alongside co-CEOs Thierry Gisserot and Xavier Thoumieux – who are increasing their stake in the company – and the rest of the management team.

Funecap was founded and is managed by Thierry Gisserot and Xavier Thoumieux, via their investment company Groupe Ophiliam. The holding owned a majority of the shares prior to the latest transaction.

Unquote previously reported that the French competition authority were reviewing the transaction in June.

According to French publication Les Echos, the GP and mangement have acquired similar stakes.

The deal was sourced in a proprietary fashion, Unquote understands. Both Thierry Gisserot and Xavier Thoumieux used to work at Charterhouse between 2004-2006, before setting up Ophiliam.

Charterhouse is currently investing via Charterhouse X, which closed in November 2016 on €2.3bn. The firm is currently targeting transactions in the €200m-1.5bn value range. The GP will support Funecap's management team in pursuing its buy-and-build strategy and organic growth plan, further developing the company's market position and consolidating the fragmented French funeral industry.

The French funeral services sector has attracted significant PE interest over the years. Pamplona Capital Management notably became funerary service Groupe OGF's majority owner in September 2013 for an estimated €900m. Two years later, it exited a 30% stake to Canadian pension fund Ontario Teachers' Pension Plan (OTTP). In 2017, Pamplona sold an additional stake to OTTP, which became its majority shareholder with a 74% stake.

Previous funding
ICG provided Funecap with €350m in unitranche debt at the end of last year. Approximately €190m was used to refinance two bond lines that ICG had set up in 2015 and early 2017. The remaining €160m was meant to be used to finance the company's ongoing investment and acquisitive growth strategy. The debt package had some covenants attached and did not trigger a dividend for shareholders.

Company
Founded in 2010 and based in Paris, Funecap is active in three segments in the funeral sector: funeral services; the management of funeral infrastructure such as crematoriums (Funecap manages around 40 crematoriums under public contracts with an average length of 20 years), funeral homes or parlors; and finally the sale and management of funeral provision contracts.

The business generates revenues of around €200m (at a growth rate of 15-20% per year), posting an EBITDA of around €40m. Funecap employs 1,500 people in 600 branches across France.

People
Funecap Group – Thierry Gisserot, Xavier Thoumieux (founders, co-CEOs).
Charterhouse Capital Partners – Stephan Morgan (partner).