Activa backs Mecadaq OBO to create build-up platform

Christophe Parier, a partner at Activa Capital, told unquote" Mecadaq's capital will be split almost equally between the GP and the company's current CEO Julien Dubecq.

Having taken over his father in 1998, Dubecq almost fully controlled Mecadaq before the deal as he was the sole shareholder alongside his father and two members of the management team. As part of the current OBO, the two managers re-invested to stay as minority owners alongside two of their colleagues, Parier said.

The OBO marks the end of a highly competitive auction for Mecadaq. Initiated around May 2015, the process evolved into exclusive talks between the owners and five suitors, Activa included, in early December.

The GP attributes its success in securing the asset to its knowledge of the aerospace subcontracting segment. "We showed Dubecq that we were acquainted with many of the owners of the companies he was targeting as bolt-ons," Parier added.

According to the Activa partner, the GP will now back Mecadaq as it aims to push revenues up from the current €20m to €70-100m via a build-up strategy. After the OBO, the plan is to kick off with a first series of bolt-ons in France. Talks are already underway to fully buy three companies; two are in the €5-7m revenues bracket, while the third recently posted €30m in sales.

The add-ons, to be financed with a capex line equivalent to 2x Mecadaq's EBITDA, will likely be followed by larger assets in the future. In that regard, Parier reveals Activa has mandated corporate finance boutique Bucéphale Finance to survey the French aeronautics segment in search of potential targets.

The OBO is the second deal to be financed via Activa's third fund, which reached a first close in excess of €200m a few months ago and is now raising funds towards a final close. The GP's investment fell within the fund's €10-30m equity ticket, unquote" understands.

The vehicle's maiden deal, revealed in mid-December, also featured a build-up project, set up around new French labelling group Alliance Étiquettes. At the time, Activa revealed the new company's two existing units – Imprimerie Laulan and Groupe Enes – would be joined by a third in early January. According to Parier, the third bolt-on should be finalised before the end of the week.

Debt
Aside from the aforementioned capex line, the OBO was supported by a two-tranche senior facility supplied by Societe Generale, also equivalent to 2x the company's EBITDA.

Company
Founded in 1971, Mecadaq manufactures aircraft components for customers including Dassault Aviation, Stelia Aerospace and NYSE Euronext-listed, Apollo-backed Groupe Latécoère. With headquarters in Tarnos, the business employs 100 staff across the production sites in the aforementioned city, Pessac and Santa Ana, California. The company most recently posted €20m in turnover.

People
Activa Capital – Christophe Parier (partner); Benjamin Moreau (investment director); David Quatrepoint (analyst).
Mecadaq – Julien Dubecq (CEO).

Advisers
Equity – PwC, Stéphane Salustro, Nicolas Guillo (Financial due diligence); Indefi, Julien Berger (Commercial due diligence); Mc Dermott Will & Emery, Henri Pieyre de Mandiargues, Nicolas de Courtivron, Herschel Guez, Anne Febvre (Legal).
Management – Transaction R, Martin Volatier, Benjamin Osdoit, Pierre Gibour (Corporate finance); Gide Loyrette Nouel, Pierre-Antoine Dubecq (Legal).

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• Activa Capital
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