NiXEN buys Babeau Seguin from Siparex et al.

Greg Gille
23 November 2011

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NiXEN has acquired a majority stake of slightly more than 50% in French home construction group Babeau Seguin from a consortium of private equity shareholders.

The deal is valued in the €50-100m range. Existing shareholders Siparex, CM-CIC, Carvest and Somfy Participations will reinvest, as will Babeau Seguin's founder and chief executive Bruno Babeau. Pechel and Avenir Entreprises also joined NiXEN as investors in the new structure. NiXEN invests from the Nixen II fund, which held a €100m first close in late 2010.

Siparex was the largest shareholder prior to the sale with a 35% stake. The exit enabled it to reap in excess of 2.5x its overall investment in the business.

The deal was not intermediated, as there were existing contacts between NiXEN and the company's shareholders and management. The buyer was attracted by the growth prospects in the private housing market, as well as the company's flexible costs structure and the good visibility it enjoys on its medium-term activity.

Babeau Seguin will now look to play a consolidating role in the fragmented home construction market – several acquisition opportunities are already being looked at and NiXEN hopes to make one to two bolt-ons a year. The company is aiming to double its turnover within the next five years.

Debt
Babeau Seguin's previous lenders (see below) provided a debt package to finance this latest acquisition – they were joined by LCL and Banque Kolb. CIC and Crédit Agricole acted as underwriters. In addition, Idinvest provided mezzanine financing.

Financing the deal was not an issue according to NiXEN, despite the current lending climate. Several factors led to the debt being oversubscribed, including the moderate leverage ratio (around 50% of deal value) and the good visibility on Babeau Seguin' activity levels for the next 18 months.

Previous funding
In 2008, Siparex merged its portfolio company Batilor with rival company Babeau Seguin – the new group was valued at €25m. Siparex invested via its funds Siparex MidCap, Siparex MidMarket II, and Franche-Comté PME III. Somfy took a 9.1% stake for €2.7m alongside remaining stakeholders CIC Est, Naxicap and three Crédit Agricole funds (Cafci, Cadinvest, Cofinep) as well as management.

CIC Est, Caisse Régionale du Crédit Agricole de Franche Comté, Banque Populaire Bourgogne Franche Comté and Caisse d'Epargne de Bourgogne Franche Comté financed the transaction.

Company
Established in 1982, the Babeau Seguin group is a builder of individual homes. It employs 250 staff across 50 agencies, operates in 10 French regions and generates a €100m turnover.

People
Pierre Rispoli, Johann Le Duigou and Frédéric Mimoun led the deal for NiXEN. Siparex was represented by Bertrand Rambaud, Pierre Bordeaux-Montrieux and Nathanaël Martin. Bruno Babeau is CEO of Babeau Seguin.

Advisers
Equity – LEK, Arnaud Sergent, David Danon-Boileau, Elina Ashkinazi-Ildis (Commercial due diligence); Ernst & Young, Pierre Bourgeois, Sébastien Huet, Olivier Thielemans (Financial due diligence); De Pardieu Brocas Maffei, Guillaume Touttée, Alexandre Blestel, Alexandre Lecomte, Marine Nossereau, Jérôme Mas (Legal, tax); Marsh, Jean-Marie Dargaignaratz (Insurance due diligence); Mandel Partners, Bertrand le Galcher Baron, Fabrice Perez (Corporate finance).
Vendors – Ratheaux, Gaetan de la Bourdonnaye (Legal); SECC, Denis Gouaille, Vincent Roux (Financial due diligence); Grant Thornton, Eric Pierre, Alexandra Bois (Corporate finance).