Management retains control of Ceva Santé Animale in 5th buyout

The management group, encompassing around 800 managers and led by Marc Prikazsky, bolstered its existing controlling position.

All the previous minority financial backers rolled over proceeds to reinvest in the business. The lead investor in this latest transaction was Temasek, the Singaporean investment company that joined the shareholder base in 2014. Returning investors also included Sofiproteol, Merieux Equity Partners, EMZ and Sagard.

The deal marks the first investment for Sagard's fourth vehicle, currently on the road with an €800m target.

A group of new backers also supported the deal. These include France-based Téthys Invest, the investment holding of the Bettencourt-Meyers family; PSP Investments, a Canadian pension investment manager; Japan's Mitsui & Co; and Klocke Gruppe, a German corporate that sold IDT to Ceva last year.

The business generates a turnover of €1.2bn and, according to French publication Capital Finance, its EBITDA amounts to around €300m. The latest capital reshuffle values the business at slightly less than €5bn, the publication reported.

This would make it one of the largest-ever buyout transactions in France – surpassed only by the likes of Solocal, Sanef or TDF, which all took place pre-financial-crisis. It would certainly be the largest where management controls a majority of the business, by some margin.

Ceva underwent a portable €2bn refinancing early last year. As reported by Debtwire, the all-senior deal was based on 6.2x opening leverage based on €275m pro-forma EBITDA – proceeds fully repaid a remaining PIK tranche of €232m, funded a €228m dividend and refinanced €1.24bn in debt, leaving €300m in cash on the balance sheet. The package also included a rolling credit facility and a capex and acquisition line. Barclays, Crédit Agricole, Natixis and Nomura were bookrunners on the deal.

Debtwire also reported in November that Ceva was seeking a PIK facility of around €600m (around 2x leverage) ahead of the latest capital reshuffle.

Previous funding
Ceva has become a fixture in the French PE landscape, undergoing four LBOs since 1999 prior to this latest transaction.

Most recently, Nixen sold its stake in the veterinary laboratory as part of a management buyout in 2014, which saw Sagard and Euromezzanine reinvest alongside new backer Temasek. The deal valued Ceva in the region of €1.5bn. Ceva's management, as well as around 1,000 employees, upped their stake in the business and retained the position of majority shareholder.

Formerly a division of laboratory Sanofi, the business span out in 1999 with the backing of PAI Partners. The GP acquired a 90% stake in the newco, while the management team, then led by Philippe du Mesnil, retained the balance.

In September 2003, IK Investment Partners backed the company's secondary buyout in a transaction that valued the business at around €200m. Management took around 40% of the equity on that occasion. Natexis Banques Populaire, Euromezzanine and ICG supplied the debt package. PAI generated an IRR of 35% from the sale. In May 2006, IK ran a €208m recapitalisation for the business.

The management of Ceva acquired a majority stake in a tertiary owner buyout backed by Euromezzanine and Nixen in 2007. The financial sponsors invested both equity and junior debt instruments. The transaction provided an exit for IK, which generated a money multiple of around 3.5x and an IRR of 40%. In 2010, Sagard invested €100m in the business in exchange for a 25% stake.

Company
Established in 1999 and headquartered in Libourne, Ceva is a veterinary pharmaceutical company that develops vaccines and pharmaceutical products for animals. The business is present in 110 countries, and has 12 R&D centres and 25 production sites. It employs 5,000 staff.

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• Topics
• Buyouts
• France
• Healthcare
• Sagard Private Equity