Siparex holds EUR 450m final close for ETI 5

Sophie Nordmann, a partner with Siparex ETI who joined the firm last year, told Unquote that the fund held a first close at the end of 2020 and had a EUR 400m target. The vehicle made its first investment in March 2021, she added.

Siparex ETI 5 did not use an external fundraising adviser, Nordmann said. Gide provided legal advice.

The fund is 60% larger than its predecessor, which held a final close in September 2017 on EUR 315m. The fund made 11 investments, the vast majority of which were in France-based companies, according to Unquote Data.

Siparex ETI 4 has realised its investment in two portfolio companies, according to Unquote Data. The GP sold its stake in active pharmaceutical ingredients chemical producer Mirafin in a sale to existing investors Crédit Mutuel Equity and Quilvest Capital Partners in July 2021, ending a four-year investment period. Siparex ETI 4 sold its stake in laboratory analytics provider Carso to ArchiMed in December 2021. 

Alongside the fund close, the GP announced the fourth investment from ETI 5: air quality and heating business Aldes. The company posts revenues of more than EUR 300m and Siparex's investment will support its acquisition of market peer Aereco.

The GP is integrating ESG KPIs and targets into its investments and value creation plans for ETI 5, Nordmann told Unquote. "ESG is not an option anymore – LPs are putting pressure on sponsors and we are trying to be ahead of this demand and to be proactive," she said. "For Aldes, ESG due diligence was a prerequisite, and we have ESG clauses in our debt package. Internally we have an ESG operating team and we are recruiting an ESG director at Siparex level."

ESG targets have also been implemented at fund level for Siparex ETI 5, Nordmann added. "The carry of the new fund is also ESG-driven, so if we don't reach a predetermined level, part of it will be redirected to a charity," she said. "We also have a fund-level equity bridge where the margin is impacted and enhanced by reaching ESG KPIs. So ESG is no longer just cosmetic; it's measured and controlled with precise targets and financial impacts for everybody." The bridge facility has been provided by French banks Crédit Agricole Corporate and Investment Bank (CACIB), Crédit Agricole Centre Est and LCL.

Paris-headquartered Siparex has six offices in France, as well as four European offices in Milan, Munich, Berlin and Brussels. The GP's current fundraises include Tilt Capital Fund 1 (TCF 1), a growth capital fund dedicated to the energy transition in Europe. The fund held a EUR 145m first close in April 2021, as reported. Siparex formed a strategic partnership with Tilt Capital in September 2021, through which it acquired a 60% stake in Tilt.

Investors
Existing investors comprise 65% of the LP base of ETI 5, with new investors making up 35%, according to a statement. One third (33%) of the fund's new LPs are private investors, of which 12% are family offices. The fund has also received commitments from international investors and Siparex Associés has also committed to the fund, according to the same statement.

"We still have a very French LP base but we are hoping for more and more European investors for the next fund," Nordmann told Unquote. "The fund is quite large to only have French investors, but we still need to make some exits and to show the returns from the previous fund to attract more European ones."

Investments
Siparex ETI 5 invests in medium-sized businesses (enterprises de taille intermédiaire) with revenues of EUR 50m-EUR 500m, deploying equity tickets starting from EUR 20m. The fund can deploy up to EUR 100m supported by its LPs, Nordmann said. It will target businesses with enterprise values of EUR 60m-EUR 350m, Nordmann said.

The fund focuses on five sectors: healthcare, agribusiness, mobility and transport, industrials, and B2B technology.

Siparex's ETI strategy aims to transform its portfolio companies into "regional leaders" and "European champions", assisting them with external growth initiatives and technological transformation.

The fund expects to invest in 12 companies in total and has made four investments over the past 18 months, the first two of which are majority deals: addiction treatment and prevention equipment producer Winncare; Destia, a provider of home care for elderly and disabled people; heritage management group Orion; and its newest investment, Aldes.

"Two thirds of our deals will be majority deals, so our next one will also be a majority one," Nordmann said. "Although we can still get good results from minority deals, it's becoming clearer that to have more space and more drive to grow these businesses, we need to make majority deals."

Asked about the fund's deal pipeline, Nordmann said that the ETI strategy is remaining active in both new deals and exits. "Although the context of the market is changing, it is still competitive and we still have rich dealflow," she said. "We have three very advanced deals, so there is a high probability that we will make three more this year, so 2022 should be quite rich in terms of investments from this fund and divestments from our previous funds."

People
Siparex – Sophie Nordmann (partner, Siparex ETI); Florent Lauzet (executive committee member, head of Siparex ETI).

[Editor's note: The article has been amended to clarify that Siparex's current fundraises include Tilt Capital Fund 1.]

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

• Topics
• Buyout
• France
• Healthcare
• Support services
• France
• Siparex
• Exclusive