European buyout firm Industri Kapital (IK) has made its first French acquisition of 2003 with the purchase of CEVA Santé Animale, a developer of animal health and nutrititional products. The business is being acquired in a secondary buyout from PAI Partners, the former captive private equity unit of Paribas Affaires Industrielles which became independent last year following the close of its E1.8bn buyout fund.
Since 1999, when PAI acquired the business from Sanofi-Synthélabo, PAI has made a number of bolt-on acquisitions to the operation, increasing turnover from E120m to E210m in the process. “We have made seven acquisitions since taking over the business less than four years ago,” explained Hervé Couffin, a partner at PAI. “It has proved to be a successful build-up.”
Financial details for the transaction have not been disclosed, although a spokesperson for PAI revealed that the transaction had produced an IRR of 35 per cent. The sale also delivered a three times multiple on PAI’s initial investment.
PAI decided to sell the business at the turn of the year and started the sale process in April. Industri Kapital beat off competition from a number of financial buyers, including ABN Amro, Apax, Alpha and Astorg Partners. “There has been a lot of interest for CEVA,” added Couffin. “It is a sound business with a strong management team which has achieved good organic growth and has significant acquisition opportunities.”
“We believe that CEVA will be able to leverage its current position and accelerate its development in areas such as companion animals, vaccines and new geographies,” said Christopher Masek, director of IK. “We are convinced that the animal health industry will be fundamentally reshaped in the medium term and intend to support CEVA in seizing acquisition opportunities and becoming a major independent international player.”
Last week, Industri Kapital announced a recapitalisation of Fives-Lille, following stronger than expected results at the French industrial engineering group. The E135m refinancing allowed Industri Kapital to fully repay the convertible bonds and shareholder loans put in place at the time of the E235m acquisition of Fives-Lille in 2000.
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 leading European supplier of smoked salmon and foie gras (March 2002).
Industri Kapital is currently preparing for a first closing of its fifth European buyout fund. The firm is hoping to raise a final total of E2.5bn for the fund.