Montagu acquires Intech from Eurazeo

The proposed sale is still subject to US competition authority approval.

Montagu is currently investing from its sixth-generation fund, which closed on EUR 3.5bn in Q2 2020, according to Unquote Data. The GP said it would aim to support the current management team in driving further organic and acquisitive growth.

Eurazeo stated it was expecting to achieve a cash-on-cash multiple of 3x and an IRR of 31% following the sale.

The vendors were set to welcome first-round bids in the week starting 28 June, Unquote sister publication Mergermarket reported at the time. Natixis Partners was advising Eurazeo and Andera on the sale, as per an earlier Capital Finance report.

Private equity firms Ardian, Cobepa and Astorg, as well as trade peer Marle – co-owned by Dentressangle and IK Investment Partners – were potential bidders for the company, according to the Mergermarket report. Montagu was already named as a suitor at the time, as were Partners Group, EQT, BC Partners and Apax.

Vendors were seeking a minimum enterprise value of EUR 500m, according to a Capital Finance report. The asset was being marketed based on a 2021 predicted EBITDA in the EUR 30m region, according to the Mergermarket report. The business generated EUR 112m in revenues in 2020 and is expected to generate a EUR 121m turnover this year.

The sale of Intech continues a busy streak of exits for Eurazeo in recent months, with the GP selling its stakes in Grandir, Iberchem, Trader Interactive and Planet this year. The firm has also launched the sale of Peters Surgical, as reported.

Eurazeo plans to accelerate its asset divestment programme in 2021 and 2022 given the maturity of its PE portfolio, as reported by Unquote.

Eurazeo still has several assets in its portfolio that were acquired more than five years ago, according to Unquote Data. These include Redspher (originally Flash Europe), a Luxembourg-based express transport service bought in 2015; Orolia, a GPS technology developer taken private in 2016; and Groupe Rosa, an omnichannel group of home and fashion brands, including Linvosges, Françoise Saget and Envie de Fraise, acquired in 2016.

Debt
As of 9 July, Montagu was deciding on whether to part-finance the buyout with a unitranche from incumbent lenders Barings and Capza or give the mandate to Arcmont, according to a Debtwire report citing several sources familiar with the matter. Management, who were keen on reinvesting in the business, were inclined to mandate the existing lenders, the report added.

Direct lenders were touting a 6x leverage, while banks pitched at 5.5x during the process.

Montagu declined to comment on the debt structure of the deal.

Previous funding
Eurazeo preempted an auction for Intech in 2017 from TCR Capital. The business had annual sales of EUR 55m and generated EBITDA of EUR 11m-13m at the time. The transaction valued Intech Medical at around 12x EBITDA.

The acquisition was the second completed with Eurazeo PME III, for which the GP held a final close on €658m in 2017. Andera Partners (then Edmond de Rothschild Investment Partners) also invested via its Cabestan Capital 2 fund.

Since then, Intech has been able to broaden its product range and strengthen its presence in the US market, where the company now generates more than 75% of its revenues, Eurazeo said in a statement. The GP added that Intech invested in its manufacturing facilities, upgrading and expanding several plants. The company also made two acquisitions, buying Pyxidis in France in 2017 and Bradshaw in the US in 2018.

Company
Based in Rang-du-Fliers, Intech co-develops and manufactures orthopaedic surgical instruments. Intech was founded in 1999 as a spine specialist, but it now supplies a range of manual instruments, handles, cases and trays, robotics-specific components and implants across multiple orthopaedic applications (spine, hip, knee, extremities and trauma). The company has manufacturing facilities in France, the US and Malaysia.

People
Montagu Private Equity – Adrien Sassi (director).
Eurazeo – Erwann Le Ligné (managing director).

Advisers
Vendors – Natixis Partners (M&A).
Equity - Alira Health (commercial due diligence); Weil Gotshal & Manges (legal); PwC (financial due diligence).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Buyouts
• Exits
• Healthcare
• France
• Eurazeo
• Montagu Private Equity
• Secondary buyout