HLD Europe to buy Exxelia from IK

The transaction values the company in the €400-500m range, which would equate to 11x EBITDA, according to French publication Capital Finance. Two sources familiar with the situation confirmed to Unquote that these figures are roughly correct. 

IK backed the business in 2014 via its IK VII fund, which closed on €1.7bn in 2013. 

HLD Europe has acquired a substantial majority stake in the business, investing via its balance sheet, a source familiar with the situation disclosed to Unquote. The deal will be supported by a new term loan B (TLB) facility, the source added.  

Exxelia's management will reinvest alongside HLD. The new owner will help Exxelia to pursue its international expansion in high-growth markets like India or China, as well as accelerate its development in the US.

IK and HLD declined to comment on the transaction. 

The completion of the transaction is subject to the consultation of employee representative bodies and the approval of the competition authorities, as well as the French and American administrations.

Previous funding
The company's private equity ownership period started in 1998, as Ardian acquired a controlling stake in the business, formerly known as Eurofarad. Subsequently, the GP sold the firm to Chequers Capital for €100m in 2003, which eventually handed it off to Qualium – formerly CDC Capital Investissement – in 2007.

More recently, Qualium sold the asset to LBO France at the end of 2010. Exxelia underwent a €175m refinancing in which LBO France netted an €82m dividend in March 2014; the GP eventually sold its stake to IK Investment Partners in September 2014.

The group refinanced its senior-mezzanine debt structure with a €160m all-senior facility in 2017. As part of the deal, the company simplified its former debt structure, which included both senior and mezzanine debt financing, with the issuance of a new €160m senior tranche. Several European lenders arranged the financing, including Bank of Ireland, BNP Paribas, Crédit du Nord, Idinvest, ING, KBC, LCL, SCOR and Siemens Bank. Furthermore, CM-CIC, HSBC and Societe Generale acted as global coordinators.

Under IK's ownership, the business strengthened its presence in the US, in particular with the acquisition of Raf Tabtronics, Deyoung, and Micropen, and diversified its expertise on new product lines, according to a statement by the GP.

Company
Established in 1965 and based in Paris, Exxelia develops and manufactures complex passive components and electromechanical products for niche industrial markets such as aeronautics, space, defence, medical and rail. The group serves institutional clients, systems and equipment manufacturers.

The business has expected pro forma revenues of around €170m for 2019 and employs 2,000 people. Exxelia has a presence in several European geographies, the US, Morocco and Vietnam. 

People
Exxelia – Paul Maisonnier (CEO).
IK Investment Partners – Dan Soudry (managing partner).  
HLD Europe – Jean-Bernard Lafonta (founding partner); Jean-Hubert Vial (partner).

Advisers
Equity – DC Advisory, David Benin (corporate finance); Canaccord Genuity, Olivier Dardel, Denis Vidalinc (corporate finance); Bredin Prat, Olivier Assant, Clémence Fallet, Florence Haas (legal); Deloitte, Cyril Stivala, Renaud Adam (financial due diligence); Arsène Taxand, Denis Andrès, Yoann Chemama, Vincent Briand (tax); BCG, Benjamin Entraygues, Florian Kahn, Florent Berthod, Vincent Benoist (commercial due diligence).
Vendor – Rothschild, Laurent Baril, Nicolas Perianin (corporate finance); HSBC, Emilie Bauvillard (corporate finance); Lincoln, Guillaume Suizdak, Charles de Fels (corporate finance); Willkie Farr & Gallagher, Eduardo Fernandez, Cédric Hajage, Hugo Nocerino (legal); 8Advisory, Justin Welstead, Mathieu Morisot (financial due diligence); Kearney, Jerome Souied, Nicholas Veg (commercial due diligence).

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