Tikehau to become majority shareholder in Cruiseline

Alessia Argentieri
02 March 2021

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Montefiore and Tikehau Capital have reached an agreement to restructure the debt of travel agency Cruiseline.

Following the deal, which is pending regulatory approval, the €80m debt of the company provided by Tikehau will be converted into equity through a debt-for-equity swap.

Tikehau will become the majority shareholder in Cruiseline, while Montefiore will retain a minority stake and maintain a seat on the company's board.

The sponsors agreed on different splits of the profits depending on the possible future exit scenarios. They have also created a new package for the management team, to provide them with a new incentive, a source close to the situation told Unquote.

Speaking to Unquote, Cécile Mayer-Lévi, Tikehau's head of private debt, described the deal as a new waterfall with Montefiore, underlining that it will guarantee cash preservation and that the company has abundant cash on its balance sheet.

Montefiore decided to put the company on the block in November 2019 and prepared a dividend recapitalisation with Tikehau, consisting of a portable debt that would have been in place for a future acquirer, the source said. This recapitalisation allowed Montefiore to recover a significant part of its equity, while doubling the exposure of Tikehau to €80m of debt, the source added.

Abénex showed interest in the sale of Cruiseline and signed a contract with Montefiore in February 2020, as reported. A source close to the matter told Unquote that Abénex was supposed to acquire the company for around €160m.

However, due to the coronavirus emergency, the firm refused to proceed with the deal and Montefiore headed to court. In July 2020, the Paris Commercial Tribunal ruled that the sale contract was null and declared it void, underlining that it was subject to certain suspensive conditions that had not been met by the vendor. Montefiore has appealed the decision.

Montefiore declined to comment.

Previous funding
Duke Street and Kings Park Capital invested in Cruiseline, at the time known as QCNS, in May 2011. Duke Street, via its Duke Street Fund VI, led the buyout and acquired a majority stake, while Kings Park, which invested via Kings Park Capital Fund I, bought a minority interest in the company. A debt package comprising two thirds senior debt and one third mezzanine was secured to support the transaction.

In January 2013, following a difficult trading period, the sponsors provided further funding to the business as part of a capital restructuring.

In May 2017, Montefiore acquired a stake of around 80% in Cruseline from Duke Street, Kings Park and the company's founder, Pascal Euvrard. The management team, led by managing director Pierre Pelissier, retained the remainder.

Tikehau provided a unitranche facility to support the acquisition. The deal valued the company at around €70-75m, based on its €7m EBITDA, according to press reports published at the time.

Company
Founded in 2005 and based in Monaco, Cruiseline is an online travel agency specialising in the sale of cruises in France, Spain, Italy and South America. The group sells its packages via different websites, such as croisierenet.com and croiseres.fr, and through telephone bookings.

Employing 325 staff, the company generated revenues of around €160m in 2019. In 2020, its revenues decreased to less than €80m and it reported negative EBITDA, a source close to the situation told Unquote.