Deal in Focus: I&F scores 3.5-4x on La Comtoise SBO

José Rojo
03 September 2015

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Industries & Finances Partenaires' exit from cheese producer La Comtoise marks the end of an eight-year investment that has seen the GP deviate from its trademark build-up approach. José Rojo reports

Industries & Finances Partenaires (I&F) recently sold La Comtoise to Céréa Capital after an uncharacteristically long eight-year holding period. Though the enterprise value remains confidential, Céréa typically targets companies in the €15-150m space.

Céréa, which claims it had followed the company for a while, secured a majority stake in La Comtoise, while the GP's agrifood-focused parent Unigrains became a minority shareholder.

Investing alongside the two firms and securing a "significant" stake was the company's management team, led by CEO Michel Vanhove.

Céréa's investment is the third to be financed via its Céréa Capital II fund. The vehicle deploys on average €3-15m per transaction. In La Comtoise's case, the actual amount fell closer to the upper end of that bracket, unquote" sources confirmed.

In addition, the GP drew funds from its second mezzanine vehicle to provide a facility together with Idinvest. An additional senior loan was arranged by Crédit du Nord and supported by Crédit Agricole Centre‐Est and Arkéa.

Founded in 1994, La Comtoise produces cheese that is then sold as an ingredient to the French food industry. The company claims to produce 65 tonnes of cheese on a daily basis via its four automated business units, with a fifth unit devoted to grated cheese. With headquarters in Louhans, the business currently employs 32 staff and most recently posted €26m in turnover.

Foraging for food
Speaking to unquote", I&F partner Franck Boulland said the firm began surveying the French food production sector in search of investment opportunities in 2005. As part of those efforts, contact was established with La Comtoise owner Michel Vanhove.

In 2007, an auction was set up for the business and I&F and Ouest Croissance emerged as winning bidders out of a group of fellow private equity funds and strategic buyers. I&F invested via its €100m second fund to acquire a majority stake in La Comtoise, while Ouest Croissance deployed €200,000 in return for a minority interest.

The takeover featured a senior debt package and a €4-5m capex facility, which La Comtoise used to expand its existing production facilities.

According to Boulland, the organic growth approach marks a departure from the firm's traditional buy-and-build strategy. Across the eight-year holding period, La Comtoise claims to have doubled production rates to a yearly 16,000 tonnes and to have attained a strong position in its segment with a 40% market share.

La Comtoise's owners began considering an exit for the business in September 2014, according to Boulland. An auction process was kickstarted by adviser Mazars, with suitors coming from both the private equity and corporate sides.

According to I&F, the investment generated an 18% IRR over the eight-year shareholding period. The money multiple reaped by the GP remains confidential, but is understood to fall within the 3.5-4x range.

People
Céréa Partenaire – Gilles Sicard, Antoine Peyronnet, Martin Bouilleux
Unigrains – Bruno Julla, Bruno Julla, Viviane Malège
Industries & Finances Partenaires – Emmanuel Harlé, Franck Boulland, Jacques de Bazelaire
Ouest Croissance – Anne Jacquinet‐Sulger

Advisers
Equity – Advance, Arnaud Vergnole, Corentin Thevenon (Financial due diligence); Lamartine, Stéphane Rodriguez, Ugo Audouard, Emmanuelle Prost, Sarah Dervin, Charlotte Moreau, Sophie Brault (Legal, tax, social due diligence); ATEM, Isabelle Camus (IP due diligence); BVG Conseil, Bruno Vincent‐Genod (Operational due diligence); Advention, Alban Neveux, Ahmed Kadri, Zoé Slama (Commercial due diligence); ERM, Julien Famy, Jerome Rathle (Environmental due diligence); Verspieren, Christian Picot (Insurance due diligence); Eurosearch, Géraud Fontanié (Management due diligence).
Vendor – Chammas & Marcheteau, Lola Chammas, Antonin Cubertafond, Roxane Bouillon (Legal); Mazars, Matthieu Boyé, Stéphane Pithois, Mathieu Maquet (Corporate finance); Grant Thornton, Marc Claverie, Pascale Pasquer, Edouard Lobry (Corporate finance, tax); Solving Efeso, Virginie Fiacre‐Gelmann (Commercial due diligence); EY, Michel MacCabe (Environmental due diligence).
Mezzanine – Agylis, Frédérique Milotic (Legal).
Management – L'lionne, Marc O'Neill, Julien Beaufreton (Corporate finance); Cabinet Horace, Loîc Richard, Amélie Tatu (Legal).