Private Equity News & Analysis

CDC Equity Capital buys into mail order

The French buyout firm has invested in Mathon, a kitchen accessories mail order company.

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CDC Equity Capital, the leveraged buyout unit of Caisse des Dépôts et Consignations, has bought Mathon, a French kitchen accessories mail order company, for an undisclosed amount.

The deal sees CDC take a 75 per cent stake in the business, with the remainder being split between the management team and Vincent Mathon, founder of the company. The debt finance has been structured by a group of local French banks led by the Caisse d’Epargne des Alpes in Grenoble.

According to Eric Philippon, a partner at CDC, Mathon has an enterprise value of around E50m and has grown by 25 per cent per annum over the last 5 years.

“We have paid a very fair price for a company that has such growth potential. Mail order businesses aren’t usually that profitable, but Mathon already is. Plus the mail order market is not well addressed at the moment, placing Mathon in a good position to take advantage of this.”

CDC intends to continue to drive growth through increased sales and marketing efforts, an improved mail order supply chain, and further acquisitions. Philippon said the firm planned to complete another two deals by the end of the first quarter.

“The company is on the verge of a massive growth spurt. In France the kitchen is a very important part of life, and Mathon is starting to feature in local newspapers,” said Philippon.

This is the second investment CDC has made from its second buyout fund Enterprises II, which is expected to close by the end of the first quarter. The fund had an initial target of E450m, but now E400m is a more realistic target, said Philippon.

“We may reach E450m but it’s going to be tough and fundraising has not been easy for our young team, which was formed four years ago. Although we have had two very successful exits, investors have been looking for a team with 15 years and more than 50 exits.”

So far Enterprises II has secured around E360m from more than 20 investors including CDC Ixis Private Equity. It is aimed at medium to large-sized transactions in the French market, and made its first commitment last July to Cegelec, am electrical engineering company.

CDC Equity Capital is a subsidiary of CDC IXIS Private Equity, which itself is a subsidiary of Caisse des Dépôts and Caisses d’Epargne. The firm has around E600m under management.