IK in partial Fives-Lilles exit

The private equity firm has completed a E135m refinancing of French industrial group Fives-Lilles, allowing the firm to repay convertible bonds and shareholder loans two years after aquiring the company.

Stronger-than-expected performance by French industrial engineering group Fives-Lille has enabled Industrial Kapital to return part of the capital it invested in the business in 2001, the private equity group said today.


A E135m refinancing allows Industri Kapital to fully repay the convertible bonds and shareholder loans put in place at the time of the initial acquisition of Fives-Lille and, as a consequence, to realise part of its investment


Industri Kapital invested E93m of equity from its E2.1bn fund raised in 2000 in a E235m public-to-private acquisition of Fives-Lille, which designs and produces equipment, primarily for the automotive, steel and aluminium industries. The recapitalisation has enabled IK to realise E50m of its investment, with a further E20m to come from a second phase.


In a statement, Industri Kapital said the recapitalisation was possible due to the strong performance of Fives-Lille, which has seen its operating profit more than double since IK took it private from the Paris stock exchange in June 2001. In 2002, Fives-Lille had sales of approximately E730m and EBITDA of E41m.


A spokesperson for Industri Kapital said the new arrangements would enable the business to grow into new markets. “The completion of the recapitalisation will allow Fives-Lille to target opportunities for external growth, particularly in the automotive sector, but also geographically. It also enables Industri Kapital to realise value early with an acquisition that was only completed two years ago.”


For the recapitalisation, Royal Bank of Scotland was appointed global mandated lead arranger and was assisted by Credit Lyonnais and IKB (mandated lead arrangers) and by HSBC-CCF (Lead Arranger).


IK has been keen to boost its presence in the French market in 2003. In May, the firm hired former ABN Amro Capital associate director Dan Soudry to its French team, headed by Christopher Masek (responsible for the French and Southern European markets). The firm set up French operations in 2000, although the team comprising Jean-Baptiste Wautier, Stefano Sirolli (both deputy directors), Rémi Buttiaux and Josep Turró Bassols (both associates) continues to work from London.


In France, Industri Kapital's investments include Laho Equipment, the number two construction equipment rental group in France (June 2000), Fives-Lille (February 2001) and Labeyrie, the European leader of smoked salmon and foie gras (March 2002).


Industri Kapital is currently preparing for a first closing for its fifth European buyout fund. The firm is hoping to raise E2.5bn for the fund.