m&a trends retail & consumer in france h1 2016 - …this report analyzes deals in the retail...

M&A Trends Retail & Consumer in France – H1 2016

The show must go on

Deal flow remains strong with food the most active segment.

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Main trends A more cautious start

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This report analyzes deals in the retail & consumer sector that took place over the course of the first semester of 2016 involving at least one French party (acquirer or target company).

M&A activity during H1 2016 has seen a slight slow down after buoyant activity in 2015 (cf. our prior issue), witnessing further international expansion of French players, strengthening and diversification of brands portfolios and relentless support to local champions by Private Equity investors. The tough retail environment also led to several transactions on distressed

companies, challenged by growing pure players and declining footfall.

We identified close to 180 transactions, amongst which c. 40 with published deal value and an additional 60 for which only target revenues were provided. Over one third of the deals took place in the food industry, which continues to attract both corporate and private equity interest. Other key sectors include home goods, appliances & electricals and clothing; they account for 19% and 18% of the deals respectively. Six deals have a value superior to €1bn.

Largest retail & consumer deals involving French players – H1 2016

Target Country Activity Acquiror Country Type Deal size

(€m)

Revenues

(€m)

Big C Supercenter FR Hypermarkets TCC TH Corporate 3 100 3 400

WMF GE Coffee machines for

professionals

Seb FR Corporate 1 585 1 100

SMCP Group FR Fashion house Shandong Ruyi

Group

CH Corporate (majority

stake)

1 300 675

Unimilk RU Dairy products,

infant nutrition

Danone FR Corporate (additional

stake)

1 300

Darty FR High tech and home

appliances

La Fnac FR Corporate 1 160 3 657

Big C Supercenter FR Hypermarkets Central VT Corporate 1 000 586

Privalia SP Flash sales Vente-privee.com FR Corporate 500

Mondelez brands US Confectionary Eurazeo FR PE 250

Eroski SP Hypermarkets and

filling stations

Carrefour FR Corporate 205

Tirumala Milk Products IN Dairy products Lactalis FR Corporate 202 200

Food 61 deals in H1 2016

Clothing 33 deals in H1 2016

Home Goods, Appliances & Electricals 35 deals in H1 2016

Wine & Spirits 13 deals in H1 2016

Personal Care & Cosmetics 22 deals in H1 2016

Specialist Retailers & Others 17 deals in H1 2016

Food A changing landscape

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Large food retailers strengthen domestic / European market presence

Group Casino acquired the remaining 50% stake in LeaderPrice for an undisclosed value, and finalized its exit strategy from Asia with the disposal of its stakes in Thailand and Vietnam for an aggregated value of €4.1bn under shareholders’ pressure to reduce its financial debt.

Carrefour pursued its expansion in Spain with the acquisition of 36 compact hypermarket stores from the Spanish retail chain Eroski. The €205m acquisition includes eight shopping malls and 22 gas stations providing Carrefour with a foothold in 27 additional cities.

Metro Cash & Carry diversifies with the acquisition of the French food service distribution company Pro à Pro from the Belgian retailer Colruyt.

Dairy large players strengthen their global presence with a focus on emerging markets

Lactalis and Danone pursued their international expansion strategy. Over H1 2016, Lactalis acquired Tirumala Milk in India and GMT Products in Georgia. In 2015, the group had already acquired several companies abroad amongst which AK Gida, Nutrifont and Kuntej. Lactalis also reinforced its cheese assortment with the acquisition of Fromagerie E. Graindorge in France.

Danone acquired an additional 40% stake in Unimilk in Russia (to rech 92,5%) and Halayeb in Egypt in 2016. Over the last couple of years, Danone has made acquisitions in Kenya, Morocco, Algeria and Ghana, showing the emphasis put by the group on developing its activities in Africa.

Meat players build scale to counter strong competition from rest of Europe

With the acquisition of Agrial’s poultry

activity, LDC wants to win back market share on the French market (42% of the poultry consumed in the country was imported, figures reaching up to 80% in catering). LDC also signed a contract to supply both KFC restaurants and McDonald's France.

Cooperative Group Arterris acquired the Synergie Bétail Viande cooperative to structure the sector. This acquisition aims to improve the bargaining power of the group to face retailers growing pressure.

Multibrand FMCG groups strengthen and diversify their portfolio

Labeyrie and Ebro foods pursued their sector consolidation. After the acquisition of Salés Sucrés, the French group specializing in foie gras and smoked salmon Labeyrie continued its expansion and announced the acquisition of Belgian group Père Olive and King Cuisine (Dutch group) in order to strengthen its gourmet snack mix.

Spanish group Ebro Foods (Panzani, Lustrucru…) acquired organic food company Celnat (pioneer of Bio food in France), thus expanding into the market for healthy and natural products. Last year, the group acquired Roland Monterrat, entering the snacking segment.

Agrial, after its merger with Eurial to form the 2nd largest dairy group in France, acquires Fromagerie Guilloteau including its “Pavé d’Affinois” brand – and strengthens its position in both high value-added products and international presence.

Geoffroy Roux de Bézieux acquires Oliviers & Co, premium oil company via his funds Notus Technologies.

With the acquisition of the US group Peace Dining Corp, the French Hana Group, owner of Sushi Gourmet, became one of the global leaders in Asian kiosks in supermarkets.

Offensive and defensive moves in agro / food drive sustained M&A activity.

Wine & Spirits

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In the wine sector, most deals were takeovers of French vineyards by private investors, either French or international. During H1 2016, five private investors acquired French vineyards, including Chateau de Sours by Jack Ma, Alibaba’s founder.

Group Campari added a new brand to its spirit portfolio with the takeover of the French family owned group Grand Marnier (€152m revenues in 2015).

Ackerman consolidated its position in the top three players of the Loire Valley, after Castel and Large cellars with the acquisition of merchant Drouet Frères, third vineyard operator in Nantes.

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(€m)

Revenues

(€m)

Agri-business

Agri-Négoce FR Agricultural

cooperative

Axéréal SW Corporate 176

Agrial (poultry transformation

assets)

Poultry

transformation

LDC Corporate 85

Groupe Beganton FR Fishing Mericq SAS FR Corporate 60

Cocorette FR Eggs production Œufs Nord Europe FR Corporate 50

Coopérative agricole Synergie

Betail Viande

FR Cattle trading Société Coopérative

Agricole Arterris

FR Corporate 33

Le Sayec - Couvoir du Mont du

Salut

FR Poultry

transformation

Aviagen Turkeys GE Corporate 25

Genica Research Corporation US Vegetable seeds Vilmorin & Cie FR Corporate 25

Food processing

Unimilk RU Dairy products,

infant nutrition

Danone FR Corporate

(additional

stake)

1 300

Mondelez brands US Confectionary Eurazeo FR PE 250

Tirumala Milk Products IN Dairy products Lactalis FR Corporate 202 200

Celnat FR Organic products Ebro Foods ES Corporate 26 22

Charcuterie Pierre Schmidt FR Delicatessen CM-CIC Investissement

/ Alliance Entreprendre

FR PE (minority

stake)

150

Cafés Folliet FR Coffee roaster bpifrance / Crédit

Agricole des Savoie

Capital / IDIA Capital

Investissement

FR PE (minority

stake)

80

Fromagerie Guilloteau FR Dairy products Agrial FR Corporate 65

Sobraques SP Fresh and frozen

food

Groupe Even SCA FR Corporate 60

Gelmer FR Frozen seafood Greenland Seafood

Wilhelmshaven

GE Corporate 58

Fromagerie E. Graindorge FR Dairy products Lactalis FR Corporate 50

Pidy Gourmet BE Semi prepared

products for

professionals

Biscuits Bouvard FR Corporate 40

Père Olive BE Fresh olives Labeyrie Fine Foods FR Corporate 30

King Cuisine NL Snacking Labeyrie Fine Foods FR Corporate 30

Oliviers & Co FR Premium olive oil Notus Technologies FR PE (majority

stake)

30

Sibell FR Premium chips Europe Snacks FR Corporate 30

Food Retail

Big C Supercenter (Casino) FR Hypermarkets TCC TH Corporate 3 100 3 400

Big C Supercenter (Casino) FR Hypermarkets Central VT Corporate 1 000 586

Eroski SP Hypermarkets

and filling stations

Carrefour FR Corporate 205

Prosol Gestion (Grand Frais) FR Fresh products

retailer

Five Arrows, Siparex,

Abénex Capital, Sagard

FR PE (new

minority

stakeholders)

1 000

Peace Dining Corp US Sushi corners in

shopping centers

Hana Group FR Corporate 77

Vitafrais FR Organic products

retailer

ProNatura FR Corporate 58

Charles Martin FR Frozen food

transportation

Even Distribution FR Corporate 30

Main deals in the Food sector involving French players – H1 2016

Note: Selected acquisitions with deal value or target turnover over €25m

PwC Analysis - Sources: Zephyr, Merger Market, Capital Finance

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Main deals in Wine & Spirits involving French players – H1 2016


(€m)

Revenues

(€m)

Wine

Chateau Perenne / Château

Guéry

FR Wine producer Chateau de Sours FR Corporate 12

Vignobles Marie-Laure Lurton FR Wine producer Philippe Ferrier FR Private investor 5

Groupe Bejot et Terroir FR Wine producer AdVini FR Corporate 50

GRM SAS FR Wine producer Guillaume Brochard FR Private investor 31

Les vins Drouets Frères FR Wine producer Ackerman FR Corporate 20

Chateau David FR Wine producer Thierry Kerdreux FR Private investor 10

Spirits

Société des produits Marnier

Lapostolle

FR Spirits (including

Grand Marnier)

Davide Campari IT Corporate 152


Main deals in Clothing involving French players – H1 2016


(€m)

Revenues

(€m)

Brands and retailers

SMCP Group FR Fashion house Shandong Ruyi

Group

CH Corporate

(majority stake)

1 300 675

IRO FR Ready-to-wear

brand

Fosun Capital Group CH PE (25% stake)

33

60

Lafuma FR Hiking, mountain

and hunting

equipment

Calida Holding SW Corporate

13

51

Café Coton FR Premium shirts M Capital Partners FR PE (minority

stake)

1

24

Balmain FR Fashion house Mayhoola for

Investments

QA PE (100% stake) 485

Carven SAS FR Fashion house Bluebell Group HK Corporate

(majority stake)

49

RAS Kids FR Premium shoes

for children

Private investors led

by the CEO

FR PE (MBO) 15

Parallèle Diffusion FR Premium shoes

for women

Referencia

International Partners

LU PE (55%

acquisition)

6

Ecommerce / Home shopping

specialists

Privalia SP Flash sales Vente-privee.com FR Corporate 500

Farfetch UK Luxury

marketplace

Temasek, IDG Capital

Partners, Eurazeo

Croissance, Vitruvian

Partners

FR (among

other

internation

al funds)

PE (minority

stake)

96

Blanche Porte FR Fashion and

home products for

seniors

CEO and executives FR PE (MBO) 200

PrivateSportShop FR Sportswear flash

sales

Pechel Industries FR PE 42

Manufacturers and traders

Desseilles FR Lace

manufacturer

Yongsheng CH Corporate 9

Tannerie Dupire FR Leather trading Novalpina FR Corporate 9



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Affordable luxury, online pure players and Health&Beauty brands remain highly sought after. Private equity is active but corporates have deep pockets.

Clothing Digging for treasure

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French affordable luxury fashion brands no longer up for grabs as investors have piled in

French affordable luxury brands are still attracting a lot of hype, leaving very few privately owned brands.

SMCP and Carven have attracted corporate players: after two LBOs with L Capital and KKR, SMCP Group (Sandro, Maje, Claudie Pierlot) has been taken over by the Chinese textile company Shandong Ruyi for €1.3bn.

French luxury and affordable luxury brands are very attractive to foreign buyers. Bluebell Group, pioneer in brands distribution in Asia, acquired a majority stake in the French brand Carven.

Private equity continues to support development of Brands: the Chinese investment fund Fosun acquired a stake in IRO. The Qatari investment fund, owner of Valentino, took over French fashion house Balmain.

The trend should continues in H2 with additional transactions, e.g. Montefiore acquiring a majority stake in Isabel Marant and Tara Jarmon taken over by AMS Industries.

International investors have also shown interest in smaller niche players. Desseilles Laces, lacemaker in Calais has been taken over by Chinese family group Hangzhou Yongshen. The Japanese Onward Luxury Group (former Gibo), acquired Paris-Moreau, one of the oldest luxury French brands of handbags and luggage to pursue its diversification strategy, alongside the leather brands Jil Sander and brand licenses (including Rochas and Michael Kors).

Online 3rd party retailers continue to grow and to consolidate the market

Since its North America adventure, Vente-privée has focused its development on the European market and has been building scale

across countries before a potential IPO. After the acquisition of a Belgian company in 2015, it acquired two additional groups in Europe during the first semester 2016: Eboutic.ch in Switzerland for an undisclosed value, and Privalia in Spain for €500m.

Galeries Lafayette Group is said to have acquired instantLuxe.com, a second hand luxury products online distributor and BazarChic to carry on its omnichannel strategy, offering customers new purchasing experiences within this booming sector.

Univers Running, the second French player in online running has raised one million euros to conquer the 8 million French joggers.

Finally, large French companies completed their portfolio through new brands or new distribution channels: Damartex acquired 100% of Vivadia, specialized in the online senior products, during H1 16 and has entered into exclusive negotiations with 3SI to acquire 3 Pagen, a distance sale specialist mainly active in Germany and Austria during H2.

Personal care & Cosmetics

10

Beauty Success builds a presence in the beauty services segment in addition to its existing retail (mainly franchise operated) network, with the acquisition of Esthetic Center (200 points of sales, franchisees).

Natural health is still in a hype with several acquisitions over H1 2016. PE-back group Inula acquired Bach flowers specialist Biofloral, to complete its product range.

OTC players build portfolio and geographical presence. After acquiring Laboratoire Oenobiol, Vemedia Pharma will join force with Laboratoire Cooper owned by Charterhouse Capital Partners.

Beauty conglomerates have shown interest in adding niche perfume brands, a fast growing segment, to their portfolio. L'Oréal and Estée Lauder have respectively acquired Atelier Cologne and By Kilian.

The sector is witnessing large deals on a global scale in 2016, with, amongst others, the acquisition of Elizabeth Arden by Revlon, and IT Cosmetics by L’Oréal in Q3 2016.

Main deals in Personal Care and Cosmetics involving French players – H1 2016


(€m)

Revenues

(€m)

Retailers

Esthetic Center FR Beauty institutes Beauty Success FR Corporate 36

Ecommerce

Vision Direct group UK Optical aids Essilor International FR Corporate 45

Brands / Manufacturers

9 acquisitions(1)

Internatl Eyewear Essilor International FR Corporate 60 (cum.)

Laboratoire Oenobiol FR Food

supplements

Vemedia Pharma

N.V.

NL Corporate 57

Atelier Cologne FR Perfume producer L'Oreal SA FR Corporate 40

Fleurance Nature FR Food

supplements

NatureMedika FR PE 25


(1) The acquisitions are ECP (Spain), Jai Kudo Polska (Poland), Optic Club (Russia), Nikon Optical Middle East (Kuweit), PERC/IVA (US),

Prime Optical, RX, eOtic& and e-lens (Brazil)

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Main deals in Home goods, appliances and electricals involving French players – H1 2016


(€m)

Revenues

(€m)

Retailers

Darty FR High tech and

home appliances

La Fnac FR Corporate 1 160 3 657

La Fnac FR High tech and

cultural products

Vivendi FR Corporate 159 3 876

Bois & Materiaux FR DIY retailer OpenGate Capital

LLC

US PE 25 640

Mr Bricolage FR DIY retailer ANPF FR Franchisees 2 160

Ecommerce / omnichannel

Manomano FR Ecommerce DIY Partech Ventures,

Piton Capital, CM-CIC

Capital Privé and

Digital Ambition Fund

FR PE 13 32

Brico Privé FR DIY private sales Ardian (5M) + BPI

(2M)

FR PE 7 55

Domisys (materiel.net) FR High tech and

home appliances

LDLC.COM SA FR Corporate 151

Manufacturers

WMF GE Kitchenware Seb FR Corporate 1 585 1 100

Parrot FR High-tech

products

HorizonLive / HG

Vora Capital / IDG

Capital Partners /

bpifrance

FR PE 300 326

Withings SAS FR Connected

objects

Nokia Oyj FI Corporate 170 c. 100

SevenHugs FR Connected

objects

Xerys Gestion, NovX

Capital, CapDecisif

Management

FR PE 13

Crosscall FR Smartphones ACG Management FR PE 5 17

Cauval Industries FR Mattress

manufacturer

Perceva FR PE 1 240

MK Direct (Linvosges,

Françoise Saget)

FR Home textiles Eurazeo PME FR PE (55% stake) 186

Becquet FR Home textiles Domoti FR Corporate 80



Home goods, appliances and electricals

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Deal rationale in the sector no different to other sectors with aspiration for critical mass and omnichannel strategies at their core

Making a bold move, Fnac and Darty join forces to bring the best of both worlds to consumers across the entire home goods universe, with the financial support of Vivendi, subscribing in April 2016 a €159m reserved increase of capital to secure 16% control of Fnac.

With the acquisition of Domisys (Materiel.net), LDLC strengthens its position among the top 5 major players in ecommerce in France.

French pure player high Tech market place Vente Du Diable acquired Pixmania, the French ecommerce player in distress previously owned by Mutares.

Home appliances champion makes step change

One of the largest deals over the semester, Groupe Seb acquired two German groups WMF, €1bn revenues, for €1.6bn, and Emsa, another German player with sales of €92m, reflecting an aggressive international development strategy - particularly with its strong presence in Germany and the UK where group SEB considered it was under represented. The acquisition also opens the door to the BtoB segment with WMF world leader in professional coffee machines and widens its cooking instrument and kitchen centric products portfolio.

Opportunities to create value through operational excellence

OpenGate Capital invests in Bois & Materiaux, a leading French distributor of building products and materials, previously owned by Wolseley - untapped value creation potential through operational excellence will be the key driver.

Chaillard Distribution was acquired by Maliterie.com following a bankruptcy procedure. Similarly Cauval in receivership was taken over by Perceva, and renamed France Bedding group for a new start.

Connected objects also attract both corporates and PE interest, with the acquisition of French Tech leader Withings by Nokia for €170m and Sevenhugs raising €13m from Xerys and historical investors.

Specialist retailers & other

13

Specialist retailers have attracted PE interest.

Weinberg Capital acquired fishing specialist Pacific Pêche, and Raise Capital took a stake in Nature & Découvertes.

In July 2016, Activa Capital took control, alongside management, of Atlas for Men, the catalogue and web distributor of outdoor textile for men.

After LFPI and Montefiore’s acquisition of Interflora in 2015, Perceva drives consolidation, with the acquisition of Au nom de la Rose to strengthen Emova Group (Monceau Fleurs, Happy, Rapid’ Flore).

Main deals in Specialist retail & other consumer goods involving French players – H1 2016


(€m)

Revenues

(€m)

Retailers

Nature & Découvertes FR Outdoor and

travel products

Raise Investment,

Crédit Mutuel Arkéa,

FR PE (minority

stake)

185

Pacific Peche FR Fishing tools

retailer

Weinberg Capital

Partners

FR PE 40

FitnessBoutique FR Fitness network Funders FR PE (30% MBO) 40

Au Nom de la Rose FR Flowers Monceau Fleurs

(backed by Perceva

Capital)

FR Corporate (PE

backed)

20

Manufacturers

Groupe Brunel FR Cleaning and

home care

products

Motion Equity

Partners

FR PE 70

DMC FR Embroidery BlueGem Capital

Partners

UK PE 57

Christian Liaigre FR Interior decoration Symphony

International Holdings

Limited

UK PE 50

SoProNem FR Cleaning and

home care

products

Quantum Capital

Partners AG

GE PE 35

D'Arpeje FR Toys Evolem SA FR PE (majority

stake)

23

Rainex FR Office supplies Exacompta

Clairefontaine

FR Corporate 11

Retailers

Nature & Découvertes FR Outdoor and

travel products

Raise Investment,

Crédit Mutuel Arkéa,

FR PE (minority

stake)

185

Pacific Peche FR Fishing tools

retailer

Weinberg Capital

Partners

FR PE 40

FitnessBoutique FR Fitness network Funders FR PE (30% MBO) 40

Au Nom de la Rose FR Flowers Monceau Fleurs

(backed by Perceva

Capital)

FR Corporate (PE

backed)

20



The show must go on..

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Overall, key trends observed in 2015 continue to drive deal activity in H1 2016

Despite Brexit, key players remain confident in their ability to drive European platforms (groupe SEB with WMF, Charterhouse with Vemedia, Manutan with Essex Electrical Wholesalers).

Several substantial carve outs following the ongoing reshuffling of groups’ brand & activity portfolio (ProàPro, Bois & Matériaux, Mondelez confectionary brands..) provide opportunities across sectors for corporate and private equity investors alike.

European players develop in emerging markets particularly on the agro business front to rech critical mass and diversify geographical risks.

Highly sought after targets in attractive segments such as beauty, affordable luxury and online pure players create competitive deal environments.

Concentration continues and post-merger integration plans must follow to deliver on value creation promises.

PwC Transaction Services thanks its clients for their continued trust

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Acquisition of a majority stake by

in

Mk Direct

Advisor of

in its acquisition by CD&R and Lutz

Minority stake of

in

Advisor of

in its acquisition by

Disposal by

of its minority stake in

Acquisition by

of

Acquisition by

of a stake in

Acquisition by

of

Advisor of

in its capital reorganization

Disposal by

of

Financière Cofidim

Joint venture between

and

Acquisition by

of

Acquisition by

of

&

Acquisition by

of

Advisor of

in its cession to investment fund Mayhoola

Acquisition by

of a stake in

Deals announced in 2016

Contacts

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Sabine Durand-Hayes Partner PwC Transactions Retail & Consumer Leader PwC France [email protected] +33 1 56 57 85 29 Anne-Lise Glauser Partner Strategy& [email protected] +33 1 56 57 84 53 Ghislaine Chevalier Director PwC Transactions [email protected] +33 1 56 57 16 04 Cécile Bouzereau Marketing & Business Development [email protected] +33 1 56 57 13 17 Ludivine Allardon Marketing & Business Development [email protected] +33 1 56 57 10 13

mailto:[email protected]






m&a trends retail & consumer in france h1 2016 - …this report analyzes deals in the retail...

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