Bridgepoint buys insurance group CEP from JC Flowers

The management team, led by CEO Philippe Gravier, reinvested in the business and retained a minority stake.

The deal values CEP at around €1.3bn, equal to approximately 10x its EBITDA, according to press reports.

JC Flowers had initially started a sale process for CEP in 2017, when it mandated JP Morgan and Messier Maris & Associés to run the auction. At the time, however, offers did not exceed €1bn, failing to meet the expectations of the vendor, which decided to put an end to the auction.

JC Flowers mandated Morgan Stanley to put the company back on the market at the beginning of 2020, marketing the asset at around 10x its €125m EBITDA, for an expected EV of around €1.2-1.3bn, according to press reports.

Bridgepoint drew capital from Bridgepoint Europe VI to finance this deal. The fund held a final close on its €5.7bn hard-cap, surpassing the initial €5bn target, in December 2017. It invests in mid-market European companies with enterprise values of €200m-1bn, operating in the consumer, business services, manufacturing, healthcare, financial services, media and technology sectors, and typically deploys equity tickets of €125-500m.

The deal was also financed by debt provided by JP Morgan, Nomura and Alcentra.

According to press reports, the debt package is composed of a term loan B of €725m deployed by JP Morgan and Nomura, as well as a €125m second lien tranche and a revolving credit facility of €50m provided by Alcentra.

This is Bridgepoint's seventh investment in the French financial sector, following its acquisitions of eFront, Calypso, Kyriba, Primonial, La Financière de l'Echiquier and Foncia.

With Bridgepoint's support, CEP plans to consolidate its market position in France, further expand in the rest of Europe and boost its growth, both organically and via strategic add-ons.

Previous funding
PAI Partners invested in CEP, at the time known as Compagnie Européenne de Prévoyance, via PAI Europe III in January 2005; the deal was valued at around €185m.

PAI mandated Rothschild to run an auction process for the company in 2011. CEP attracted interest from several private equity firms, including Bridgepoint, Apax and AnaCap.

JC Flowers won the auction and acquired a majority stake in the company in an €842m deal. CEP's chair and founder Hubert Guillard and the management team reinvested alongside the GP.

Company
Established in 1991, CEP specialises in loan insurance brokerage, working in partnership with banks, credit companies and insurance retailers.

The company operates via its subsidiaries Compagnie Européenne de Crédit, Empruntis, Immoprêt, ACE Crédit and CBP, which is based in Saint-Herblain, near Nantes, and specialises in creditor insurance and personal protection cover.

CEP is headquartered in Paris, with additional offices in Milan, Barcelona, Dusseldorf and Warsaw, and employs 1,180 staff (84% in France and 16% in the rest of Europe). It reported an 8% annual increase in its revenues over the last four years and generated turnover of €242m in 2019.

People
Bridgepoint – Vincent-Gaël Baudet (partner).
JC Flowers – Thierry Porté (partner).
CEP – Philippe Gravier (CEO).

Advisers
Equity – Rothschild & Co (corporate finance); Latham & Watkins (legal); Eight Advisory (financial due diligence).
Company – Gide (legal); Freshfields Bruckhaus Deringer (legal); KPMG (financial due diligence).

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• Topics
• Buyouts
• France
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• Bridgepoint
• JC Flowers
• France
• Rothschild
• Latham & Watkins
• KPMG