How does Ardian support sponsors and companies to create value?
01 June 2020
Alexandre Motte: I think one of our major advantages as a co-investor is our ability to use Ardian’s expertise and networks to add value for sponsors and portfolio companies. The Emera deal is a great example as we bring a lot of expertise that complements what Naxicap can offer. This includes access to our international office network, especially in Italy and Spain, as well as France, to help source M&A opportunities and accelerate Emera’s international expansion. Further expertise is available thanks to input from Ardian’s digital officer, who helps with the digital transformation of all our portfolio companies. We have also started to discuss partnerships and business development opportunities with other Ardian portfolio companies. In addition, as improving ESG performance is key to the value creation plan, we will give Emera access to our specialist Sustainability team.
Patrick Kocsi: We can also make a difference in the pre-signing phase, which can be key in some cases. In the Lindfast deal, it was our ability to react that gaveus an edge, as well as our scope to invest larger tickets through Fund V. We already knew Nautic Partners well through our Fund of Funds relationship, so we knew they had a strong track record in the sector. However, this was a large deal for them so they wanted a partner to come in alongside them to bid on the asset. Nautic approached us early in the process and we did our due diligence alongside them. Our ability to speak for a sizeable portion of the equity at signing became a critical component of securing the deal for the sponsor.
Ardian has been an invaluable resource to Nautic and LindFast, and we are grateful for the continuing relationship.
Alexandre Motte: We had a similar situation with Palacios in Spain and Emera in France. These were larger transactions and again our ability to underwrite 30% to 50% of the equity investment was a big factor for the sponsor. Our longstanding Fund of Funds relationship with MCH and Naxicap was also important. But most of all, Ardian’s experience and knowledge of the food, agribusiness and healthcare sectors were key, because it allowed us to complete our due diligence quickly and also because the management teams recognized the value our network in these sectors could bring for their business. So having Ardian on board as a co-investor helped the sponsors differentiate from other bidders and win the deal in a very competitive process.
Patrick Kocsi: People often think of co-investment as a passive investment alongside the main sponsor, but in instances where we can add real value, we often get much more actively involved. We have a board seat at Lindfast, so we are speaking to the CEO and Nautic Partners regularly and supporting them wherever we can.
Ardian participated in the acquisition process as of the first meeting and its presence and commitment to the deal guaranteed its success
Alexandre Motte: Yes, it is the same with Palacios and Emera. We are happy to play an active role in the boardroom to support the company and the lead sponsor. For example, with Emera, Antoine Lencou-Barême, Managing Director at Ardian in charge of the transaction, has known the CEO for more than twenty years, and we are also partnering with the company’s founder, who re-invested in the buyout, so there is a very strong set of relationships around the table. With both Emera and Palacios, we have started to play a very active role in executing the value creation plan, especially in areas like digital transformation, which is becoming a huge issue in the healthcare sector. With Palacios, we are focusing our effort on accelerating international expansion by leveraging our connections to enhance organic growth, particularly in France. We are also actively sourcing and screening M&A opportunities in Europe and the US. We are ready to move quickly and help provide the financial support Palacios needs to take advantage of major opportunities.
Patrick Kocsi: It is important to work closely with the lead sponsor and help them execute the value creation plan in whatever way we can. Contributing directly to the governance of the company aids that process because it helps us to maximize the contribution we can make. There is a lot Ardian can bring to a co-investment situation.
As of the due diligence phase, we identified Ardian as a future shareholder capable of contributing significantly to Emera's development.