Astorg sells Photonis back to AXA after three years

French buyout firm Astorg has sold optical equipment maker Photonis back to AXA Private Equity for €510m, double the amount it paid its peer in 2008 when it acquired the company.

Astorg Partners has sold French image intensifier company Photonis to former owner AXA Private Equity for a sum understood to be €510 million, split almost 50:50 between equity and debt financing, according to a source close to the deal.

ING, Société Générale and IKB arranged €200 million of senior debt to back AXA’s buyout of the company, with Indigo Capital and Partners Group arranging a €50 million mezzanine facility.

It will be the second time AXA has owned the company, having previously managed it between 2001 and 2008 before selling it to Astorg in a €250 million deal.

Astorg is understood to have financed its 2008 acquisition of Photonis with about €150 million of debt financing, with the company’s management and select LPs co-investing in the buyout.

Astorg declined to comment on its return from the investment, which was made using capital from its €800 million 2007-vintage Astorg IV fund. Photonis was the fund’s third investment, and its disposal is the fund’s second realisation following the sale of SCT Telecom in May.

But after accounting for dilution from the management team's stake in the company – which now stands at 25 percent – and mezzanine debt still on the company's balance sheet, Astorg made more than 2.5x its money, an investor source said.

Christian Couturier, a partner at Astorg, told Private Equity International in an interview that the firm mandated Merrill Lynch and Bucéphale to sell the company earlier this year.

“We had helped to enlarge Photonis’ manufacturing capacity, so it was able to sell twice as many image intensifier tubes. We also invested a lot in research and development. But we understood that it would take about three to four years to fully realise the fruits of that increased investment in R&D – taking our holding period to between six and seven years. So given the company’s good financial performance, we decided to begin an auction process. However, AXA pre-empted that in July with an offer.”

AXA managing director Mathieu Antonini said: “Our intention is to assist the management of the company in developing new applications and implementing a selective build-up strategy to strengthen its position in international markets.”

AXA oversaw a buy-and-build strategy during its original ownership of the business, from 2001 to 2008. It created Photonis in 2001 after buying a subsidiary of Dutch conglomerate Philips, and then grew the group internationally through five bolt-on acquisitions.