Eurazeo in €320m final exit from Rexel

Ellie Pullen
24 September 2014

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Ray Investment, the private equity-owned holding company that acquired French electrical equipment supplier Rexel in 2005, has made a final exit from the business for €320m.

Ray Investment has sold its remaining 7.1% stake in Rexel – equivalent to 20.9 million shares – through an accelerated bookbuilding to institutional investors at a price of €15.35 per share.

The holding company is now wholly owned by Eurazeo, but was previously also owned by Clayton Dubilier & Rice (CD&R) and Bank of America Merrill Lynch at the time of the original buyout in 2005.

Ray Investment has been gradually selling down its stake in Rexel since the beginning of last year through a series of placements. In February 2013, the holding company sold a 14.7% stake – equivalent to 40 million shares – in Rexel for €640m. Eurazeo reaped €225m from the sale.

This was followed by the divestment of a further 10% stake – or 28.1 million shares – for €500m in June of the same year, with Eurazeo realising €85m this time round.

Last August, Ray Investment divested a further 28.8 million shares for €525m, with Eurazeo receiving €100m from the sale.

Overall, Eurazeo has reaped a 2.3x money multiple on its initial investment in Rexel. Following the sale, the firm's cash position stands at around €700m.

Previous investment
Rexel was acquired by its private equity backers, through Ray Investment, in a €1.9bn buyout in March 2005. The deal was led by US firm CD&R, which took a 36.5% stake in the holding company. Eurazeo acquired an interest of 35.6%, alongside the 25.7% shareholding taken by Bank of America Merrill Lynch (then MLGPE).

At the time, the company had an enterprise value of €3.8bn, with total equity worth €2.6bn, and was partially listed on the Paris stock exchange. The CD&R-led group of investors took on Pinault Group's 73.45% interest in Rexel and made a compulsory offer to acquire the remaining shares to take Rexel private.

Rexel then floated on the Paris Stock Exchange in 2007. Its IPO valued the business at €4.2bn and saw backers Ardian (then Axa Private Equity) and North Cove Partners (formerly BAML Capital Partners) fully exit the company, according to unquote" data.

Company
Founded in 1967 and originally named Compagnie de Distribution de Matériel Electrique (CDME), Rexel distributes electrical equipment to professional customers in the commercial, residential and industrial sectors.

Based in Paris, the company operates in 38 countries, with 2,300 branches and 30,000 staff. Its revenues for 2013 reached €13bn – slightly down from 2012's €13.4bn – with an EBITA of €686.9m.

People
Rudy Provoost is the chairman and CEO of Rexel.