French mid-market on the mend

Greg Gille
26 July 2012

Tweet
Facebook
LinkedIn
Google plus
Send to

At long last, activity in the French €100m+ buyout market showed signs of improvement in the second quarter. The Alain Afflelou and St Hubert transactions certainly helped: the former was acquired by Lion Capital in an €800m SBO in May, while Montagu clinched the spread producer from Dairy Crest Group for €430m in June.

Add to this a handful of sizeable mid-market buyouts – such as the Prezioso Technilor and Stokomani deals – being completed in Q2, and it will come as no surprise to see activity figures in this segment shoot upwards following a poor showing in the first months of 2012.

unquote" data recorded six transactions valued in excess of €100m taking place in Q2, a three-fold increase on the first quarter figure and the largest amount witnessed since Q3 last year. Value-wise, mid-cap buyouts broke the €2bn barrier in Q2, again a noticeable 150% uptick on the mere €800m recorded in the previous quarter and the highest figure in the sample since Q3 2011.

That said, this belated awakening is a far cry from the buoyant activity seen at the same time last year in France. unquote" data recorded 15 deals in the €100m+ segment in Q2 2011 – more than double the current year's Q2 figure. At €7.7bn, the overall amounts invested between April and June 2011 also dwarf the aggregate value of deals completed over the same period this year.

Furthermore, France has failed to be the locomotive of European mid- and large-cap buyout activity this time around. France comfortably outpaced the UK before the summer last year, both in volume and value terms, but Britain just about edges it in 2012 – albeit by a single deal and a few million euros in aggregate value.

However, where France has clearly lost ground is at the upper end of the market: the country has not been home to a single €1bn+ buyout this year, when it witnessed three such deals in 2011. Meanwhile, several of its neighbours, including Germany and Italy, have taken their share of the mega-buyout market in the past few months. This could change soon however: AXA Private Equity is understood to be close to striking a deal on the secondary buyout of engineering group Fives, which could be valued at up to €1bn.