LBO France secures two deals in a week

Following the two transactions, LBO France’s small-cap fund is now approximately 70% deployed having made seven investments.

LBO France has acquired 58 percent of Fine Sounds, an Italy-based audio business, and a 72.8 percent stake of the Vaglio group, which operates limestone mines for the construction sector, according to a statement. 

The companies, which were acquired by LBO France's small-cap team, had enterprise values of €100 million and €24 million respectively, according to a source familiar with the matter. LBO France declined to comment beyond the statement.   

Fine Sounds group operates in the high end audio market, and has production sites in Europe and the US. With 250 employees, the group had roughly €60 million in sales in 2013. LBO France will aim to accelerate the business’ growth through the offering of new products.

The Vaglio group operates the Jaumont limestone quarry which covers over 150 hectares and is located roughly 20 kilometres to the west of Metz. The two types of limestone extracted are used by the construction industry in the form of aggregate crushed for roads, civil engineering and in the production of concrete. With roughly 120 employees, the group had sales of €19 million in 2013. LBO France will support the company with the internationalisation of the group in Luxembourg and the preparation of new high value-added products, like washed sand.

LBO France acquired the businesses using its Hexagone III fund, a €154 million 2010-vintage. The small-cap vehicle, which targets majority investments in “dynamic companies entering a new phase in their development” focuses on businesses with enterprise values of less than €100 million. Since 2003 more than 25 acquisitions have been executed over three generations of funds.

Following the two investments, this fund, which made seven investments in total, is now more than 70 percent deployed. Hexagone IV could start fundraising before the end of the year, according to the source.

As well as its small-cap fund, LBO France invests from its White Knight vehicles. In March, it refinanced portfolio company Labeyrie with a €275 million high yield bond issuance. Its current fund, White Knight VIII, is fully invested.

LBO France is currently in market attempting to raise €1 billion for its successor fund, White Knight IX. A number of LP commitments are understood to have been made. It is expected that the firm will hold a €300 million first close before the summer.