Retailer Carrefour has sold its 74 per cent stake in Picard Surgelés, the frozen food retailer, for E920m to a consortium led by British private equity firm Candover and its French partner Chevrillon et Associes. The deal is one of France's largest buy-outs to date.
Commenting on the deal, Christopher Spencer, a director of Candover who will join the board of Picard, said: “Picard is an exceptional business with a powerful and well respected brand commanding high customer loyalty. It has expansion plans in place which will enable it to benefit from the trend towards modern lifestyles, and customer demand for the high quality and variety offered by its product range. The business stands in good stead to achieve excellent financial growth in the coming years.”
Picard's chief executive Xavier Decelle, who has been with the business for 15 years, leads the management team. He said: “Following the buy-out, Picard will be in a strong financial position to quickly implement its expansion strategy throughout the country with the support of its new backers. We are very optimistic about the prospects for the group.”
Investors committed a total of E320m in equity to the deal which was led, structured and arranged by Candover and Chevrillon & Associés. The private equity firms have committed E138m and E35m of equity respectively. HSBC Private Equity has invested E53m and Astorg, a French private equity firm, has put in E27m. The management has also subscribed to the equity.
Candover was advised by UBS Warburg which also provided the senior debt tranche of E411m. E122m of mezzanine financing and E39.6m of PIK was arranged on a joint basis by UBS Warburg and Intermediate Capital Group, which fully underwrote both. Additionally, an E27m vendor loan is in place.
Picard has a total of 441 stores throughout France. Its product range encompasses around 1000 items which are manufactured and sold exclusively through Picard's distribution networks. It also provides a home delivery service through a telephone ordering service and the internet.
In 2000 Picard's turnover increased by 16 per cent to E556m and the company achieved EBITDA of E82m. According to a statement, the company's management sees substantial opportunities for growth within the French market. Around 200 store acquisition sites have been located as the basis for rolling out a growth strategy over the next five years.
Including the Picard buy-out, over the last three years the Candover 1997 Fund has invested in five Continental European transactions with a total value of over E1.9bn. The listed private equity house is in the process of raising a new fund.