Perceva set for acquisition of building materials firm

The French turnaround firm is about to announce a second investment from its second fund

French turnaround firm Perceva is finalising agreements for the acquisition of a building materials company and plans to make an announcement in mid-June, Perceva president Jean-Louis Grevent told Private Equity International.

The transaction will be Perceva’s second from its second fund, a €200 million ($223 million; £144 million) vehicle focused on the French market that closed in 2014, Grevent said. It follows the announcement on 11 June that Perceva has entered into exclusive negotiations with the US’ Fruit of the Loom, a clothing company controlled by Warren Buffet’s Berkshire Hathaway, to acquire France-based lingerie company Vanity Fair Brands Europe.

Grevent declined to comment on the value of the transaction, but noted that the European unit of Vanity Fair was not profitable. The transaction is expected to be finalised in July once it has been approved by the company’s employees.

The company designs and distributes four brands, Variance, Lou, Vanity Fair and BestForm, and a swimwear line Cherry Beach. It reported an annual turnover of €55 million and employs 300 people in France and Spain, according the announcement.

About 60 percent of the company’s current market is in France and Perceva plans to expand its international presence and invest in raising brand awareness, as well as the company’s production facilities and improving its organisational structure.

The Vanity Fair transaction was introduced to Perceva by French bank Societe Generale, which was appointed by Fruit of the Loom to approach investors, Grevent said. Fruit of the Loom were looking for long term investors and the partnership between the two companies will continue as the Vanity Fair and BestForm brands will remain under licence.

“The shareholder has been focused on the US. We know that this brand has a lot of power to expand,” Grevent said.

Perceva’s second fund will make one or two investments a year in French companies and hold them for five-10 years, Grevent said. “We do very sure deals, we spend a lot of time on the ground and are hands on investors,” he said. “We are swamped by deals. We see more than 100 every year.”

On the Vanity Fair transaction, Perceva was advised by lawyers Clifford Chanceand Reed Smith, and financial advisers McKinsey and PwC, while Fruit of the Loom were advised by law firms King & Spalding and Franklin, and financial adviser Societe Generale.

Perceva’s first fund closed at €150 million in 2011, as previously reported by PEI. The last deal from that fund was the acquisition of Monceau Fleurs Group, a French flower business.