Carpenter Corporation acquires Engineered Foam business of Recticel

Facts

Involved firms and advisors buy side:
Structuring and negotiation of the transaction: Stibbe 
Competition aspects and remedial actions: Stibbe, McGuireWoods LLP (US, UK and PRC)
Due diligence: Stibbe (BE & NL), McGuireWoods LLP (US, UK and PRC), Chiomenti (Italy), Cuatracas (Spain), Phoenix (India), Bodenheimer (Germany), BHM Avocats (France)  
Financial due diligence and integration preparation: KPMG (US and Belgium) 
Transaction services and Corporate finance advisor to the buyer: Ducera (New York)
Involved firms and advisors target: Allen & Overy, Eight Advisory, J.P. Morgan
Involved firms and advisors sell side: Allen & Overy; Eight Advisory, J.P. Morgan 

Brief description / Deal outline:
Carpenter Corporation, a US privately held company active in the foam business, developed and implemented a “white knight” strategy whereby Recticel implemented a poison pill in the course of hostile public take-over bid by Greiner on the shares of Euronext Brussels’ listed Recticel, by ultimately agreeing to acquire the main historical activities of Recticel, i.e. the engineered foam business.

The completion of the transaction requires the obtaining of clearance by the competition authorities in various jurisdictions, including the United Kingdom, and thus remedial divestments, as well as the split and carve-out of Recticel’s activities in two groups, i.e. the insulation business, and the engineered foams business.

Why should this deal win the Award for Best Large Cap Corporate Deal?

Motivation 1

The overall context of the transaction is very relevant to assess the transaction:

• On 14 May 2021, Greiner, a global supplier of plastics and foam solutions, agreed to acquire a 27% stake in Recticel from its largest shareholder Compagnie Bois Sauvage.
• On the same day, Greiner also announced its intention to launch a voluntary conditional takeover offer on Recticel.

We believe the transaction should be nominated for a myriad of reasons:

1) Transaction was important component in the overall defence strategy for Recticel: the sale of the Engineered Foams division to Carpenter – which was announced on 11 October 2021 – marks the culmination of the defence strategy against Greiner’s unsolicited public takeover approach initiated by Greiner in May 2021. By selling its Engineered Foams division (one of its 3 divisions besides Insulation and Bedding) to Carpenter, Recticel successfully defended itself against the unsolicited takeover of Greiner. In February 2022, Greiner announced that it agreed to sell its stake in Recticel to Baltisse.

2) Value creation for Seller: this transaction (together with the eventual sale of the bedding division to Aquinos for € 122 million, as announced on 18 November 2021) was executed by Recticel, demonstrating superior value creation vs the unsolicited offer of Greiner. The share price of Recticel increased to ca. € 17.50 by year end 2021 and increased further in early 2022, reaching € 22 in April 2022, well above the € 13.50 takeover offer price of Greiner.

3) Value creation for Acquirer: for US-based Carpenter, the acquisition will strengthen their position in the technical foam markets in North America and in Europe through a more diverse and complementary product offering, while establishing a presence in Asia Pacific. It would also accelerate the expansion of the acquirer’s offerings into new markets.

4) Strategic reorientation for Recticel: the sale of the Engineered Foam division (together with the sale of the bedding division, which Recticel intended to divest as per its announcement in February 2021) fitted into a strategic re-orientation of the Group to focus exclusively on its Insulation Business, presenting excellent growth and profitability prospects going forward.

In addition, many factors contributed to the uniqueness and overall complexity of the transaction:

5) Transaction had to be approved by a Special Shareholders Meeting: given the transaction took place while Recticel was under takeover offer, it had to be approved by a Special Shareholders Meeting. A strong mobilisation of both institutional and retail shareholders lead to close to 74% of the outstanding shares being present or represented on the Special Shareholder meeting which was held on 6 December 2021. Of the votes casted, 63.5% were in favour of the sale of the Engineered Foams business to Carpenter. It should be noted that 27% of the shares were held by Compagnie Bois Sauvage.

6) Carve-out: the sale of the Engineered Foam division implied a carve-out of the business increasing the overall complexity of the transaction

7) Cross-border transaction: sale to US strategic buyer.

8) Parallel executions: the management and advisors of Recticel had to execute (in addition to their day-to-day responsibilities in running the company) the overall defence of the company, sale of the Engineered Foams division, sale of the Bedding divisions as well as the carve-out preparations for both assets.

Motivation 2

• Media coverage as the first Belgian poison pill applied in Belgium;
• Significant deal value;
• Complexity of the transaction involving Belgian securities’ and takeover regulations, competition aspects in various jurisdictions, the complex carve-out of the business, and international scope of the activities over more than 10 jurisdictions.

What was the deal rationale?

The deal involved two companies with a longstanding history as leading industrial groups. Recticel was founded in 1778 in Wetteren and for many decades was part of the Société Générale group. The last decades, it has undergone substantial changes in its structure and organisation. Recticel’s Engineered Foams currently consist of 34 manufacturing locations spread over 4 continents (Europe, North Africa, Asia Pacific and the USA), employing around 2,754 people. In 2020, the business line generated total pro-forma sales of € 562 million, excluding the Nordic bedding activities (€ 15 million).

Carpenter Company, founded in 1948, is privately owned and headquartered in Richmond, VA (USA). It is considered one of the largest integrated producers of polyurethane foams with 56 production sites and approx. 4,300 employees worldwide. Carpenter, with 2020 annual sales of around USD 2 billion, Carpenter intends to further develop its flexible foams activities by complementing its existing product offering with technical foams, and expanding its customer base and geographic reach.

The deal with Carpenter provides a strong strategic fit with Recticel Engineered Foams, with a highly complementary industrial footprint and product portfolio. Like Recticel, Carpenter has a clear customer focus and places high importance on R&D. The synergies between the Recticel Engineered Foams business and Carpenter’s foams business will result in one of the world’s largest vertically integrated manufacturer of polyurethane foams and specialty polymer products.

The structuring and implementation of an agreement between the two parties required the reconciliation of the respective goals of both buyer and seller. Prior to the involvement of Carpenter, the majority shareholder of Recticel, i.e. Greiner AG had the option to acquire in aggregate a stake in Recticel of approx. 27% of all shares and issued a voluntary offer on all remaining shares. Recticel considered the public offer of Greiner undervalued the company considerably and did not allow Recticel to further fully develop its own strategy.

Carpenter was not interested to launch a potential counter bid, as it was uncertain whether it would be able to proceed with a delisting, and/or the split and carve-out of the respective businesses of Recticel following a counter-offer, taking into account the stake already held or controlled by Greiner. In order to be able to offer maximum value to Recticel and the shareholders of Recticel and be able to implement the carve-out of the REF business with an approval threshold of 50% votes cast (thus not requiring the blocking stake of Greiner), Carpenter offered Recticel to directly acquire the engineered foams business of Recticel, rather than a counter public offer.

Recticel developed a comprehensive information strategy to inform shareholders of the proposed transaction and held a Special Shareholders Meeting during which the sale of the Engineered Foams business line to the US company Carpenter was proposed.

The completion of the transaction requires a complex carve-out of all historical engineered foams activities in many jurisdictions, and the implementation of appropriate temporary services agreements between the two businesses, while at the same time fully complying with all competition regulations and obtaining the necessary approvals of the competent competition authorities.

Where lies the value creation?

• Value creation for Recticel shareholders (and superior alternative vs € 13.5 offer of Greiner), as evidenced by the share price evolution in the months following the announcement of the transaction (see above).
• Value creation for acquirer through synergy creation as it will strengthen their position in the technical foam markets in North America and in Europe through a more diverse and complementary product offering, while establishing a presence in Asia Pacific.
• Finally, it will also accelerate the expansion of the acquirer’s offerings into new markets.

The synergies between the Recticel Engineered Foams business and Carpenter’s foams business will result in one of the world’s largest vertically integrated manufacturer of polyurethane foams and specialty polymer products.

On the other hand, Recticel will continue as a listed company to focus, foster and grow its insulation business and has maximized the means from the sales of the REF business to further invest and grow the insulation business.

What is the impact of this deal for the stakeholders?

After due consideration of alternatives, the Board of Recticel concluded that the sale of the Foam division to Carpenter would create superior value for shareholders and a better strategic project for all stakeholders by focusing the group on its Insulation Business Segment.

Taking into account the highly compatible footprint of Recticel and Carpenter, Recticel’s Engineered Foams employees and customers will be able to contribute to Carpenter’s global, industrial growth. The complementarity in terms of product range and geographical presence clearly offers a lot of opportunities for end-consumers, retailers and employees. Recticel’s remaining employees will be able to focus on Recticel’s insulation.

What was particular about the deal process?

Particularities and complexities have been summarized above but in essence relate to:
(1) transaction as important part of the overall successful defence mandate

(2) transaction required approval by a Special Shareholders Meeting given company under takeover offer, which required mobilisation of shareholder base

(3) carve-out transaction given sale of a division

(4) management and its advisors executed successfully in parallel the defence, this transaction as well as the sale of the bedding division

(5) cross-border nature of deal.

The structuring, negotiation and approval of the transaction required an in-depth knowledge and creative implementation of both M&A practices, public takeover regulations and obligations of listed companies. Carpenter structured a unique offer to Recticel whereby both parties were able to meet their respective goals (i.e. acquisition of the REF business by Carpenter and counter a hostile public offer of Greiner, implement its strategy to become a strong isolation player, and offering maximum value for the company and thus shareholders by Recticel). The transaction involved the implementation of a poison pill for the first time in Belgian public takeover history.

Do the management or entrepreneurs deserve a special mention?

The management of Recticel did a terrific job by executing the transaction while being under the pressure of an unsolicited public takeover offer. They continued to focus on running the company’s day-to-day operations, while at the same time executing successfully the parallel sale of two out of its three divisions (Engineered Foams, Bedding), as well as preparing the carve-out of both divisions.

Taking into account the complexity and size of the transaction, the negotiation and follow-up of the implementation of the transaction requires the continuous involvement of strong leadership by both CEO’s, legal counsel, COO’s and CFO’s of the respective parties.

Stadsbader Group acquires BAM Contractors

Facts

Involved firms and advisors buy side:
Financial & Tax: Deloitte
Legal: DLPA Advocaten
Involved firms and advisors target:
Financial & Tax: PwC  
Legal: NautaDutilh
Involved firms and advisors sell side:
Financial & Tax: PwC  
Legal: NautaDutilh, Lazard

Brief description / Deal outline:  

The Harelbeke-based construction company Stadsbader has acquired BAM Contractors, the Belgian subsidiary of Dutch construction company Royal BAM Group. BAM Contractors’ business is complementary to Stadsbader as they hold a leading position in the Belgian construction market for large infrastructural and industrial projects for public and private clients.      

Stadsbader has its head office in Harelbeke, the location where all activities started in 1946. Today, 75 years later, the family-owned company has evolved into a multidisciplinary construction group, with various technical divisions and production sites spread across Belgium and the Northern part of France.   
Stadsbader’s core business lies in the field of infrastructure projects, construction and techniques, for both private customers and public authorities.     

Due to setting a far-reaching extended flexibility and quality as a priority, Stadsbader acquired a leading position in the Belgian contractor market. Special attention for safety, sustainability and innovation makes Stadsbader a reliable partner for projects with complex requirements.  
Each day more than 1,200 people are active on 125 construction sites in Belgium and the neighboring countries. This results in a rich and extensive portfolio with numerous references in the most diverse sectors of the corporate world.    
As a reputed contracting firm, Stadsbader is also member of the “Association of Belgian Contractors of Large Constructions” (ADEB-VBA). Mr. Dominique Valcke (CEO and owner of Stadsbader) is the vice-president of ADEB-VBA.   

In 2021, Stadsbader was rewarded for the 2nd consecutive year as the title “Best Managed Company”. The “Best Managed Companies” programme recognizes private businesses which set the highest professional standards of business performance. The awarded companies are examples of resilient entrepreneurship and sustainable growth. The programme is supported by Deloitte Private, Econopolis and KU Leuven. In addition, Stadsbader was one of three final laureates of the EY Family Business Award of Excellence 2020.      

BAM Contractors is mainly active in large civil infrastructure / construction works (f.e. Scheldetunnel, Oosterweelverbinding, etc.).     

This acquisition resulted in a growth of c. 50% for Stadsbader. Main reason for the acquisition is the complementarity of the activities. Whereas BAM Contractors is specialised in large civil projects, Stadsbader is rather active in construction, roads and tehcnics. Both groups work together on several projects, such as Oosterweel.    
BAM Contractors will continue to exist as a separate business unit under the leadership of the current management.      

Main rationale for the deals is to increase the scale of the larger group as well as realising commercial and cost synergies. It also ensures continuity for the current employees of BAM Contractors.       

Why should this deal win the Award for Best Large Cap Corporate Deal? 

Motivation 1 

Project Bridge involves a top Belgian-buyer transaction in the fast moving and challenging construction market involving one of Belgium’s leading family-owned companies in the sector, i.e. Stadsbader. After having grown significantly over the past years, Dominique Valcke and his team managed to secure growing order books and established an absolute market leading position as provider of road construction, construction and techniques services.      

BAM Contractors is well known for its experience in the field of complex civil projects and rail works. Stadsbader Group is also already an important contractor in road construction, construction and techniques with far-reaching vertical integration in the field of equipment and production entities. Stadsbader has always been in family hands, and has been led according to clear family-based values. This has resulted in consistent revenue and profitability growth, through a combination of organic and M&A growth. Although BAM Contractors has been part of the listed Dutch Royal BAM Group, the management team of BAM Contractors has always shared and operated by the same family value, hence the perfect match.     

This new chapter offers many opportunities in the further development of the activities of Stadsbader Group. BAM Contractors has an impressive order book with complex projects such as the reconstruction of the Vilvoorde Viaduct, the Nieuwe Sluis Terneuzen and the construction of the Scheldt tunnel as part of the Oosterweel project.     

With the addition of the 400 employees and € 190 million turnover of BAM Contractors, Stadsbader Group now employs 1,650 people and achieves an annual turnover of € 600 million. With this acquisition, Stadsbader Group is more than ever a multidisciplinary contractor.      

Project Bridge involved multiple elements making this deal a great landmark for our Belgian construction industry:   

• Family-owned company growing through inorganic but risk-balanced strategy.   
• Establishment of a leading multidisciplinary contracting player in the market.   
• Highly strategic deal driven by partial exit of Royal BAM Group out of Belgium.    

• Sustaining employment and ensuring a stable strategic, sustainable growth for BAM Contractors’ employees.

Motivation 2 

The divestment of BAM Contractors will support BAM Group’s capital ratio by shortening the balance sheet and will reduce liquidity and the use of bonding. Moreover, the divestment will reduce BAM Group’s exposure to large civil engineering projects.   Following the sale, Royal BAM Group will report the assets of BAM Contractors as held-for-sale as per 2021. The transaction will result in a limited book loss, which is incorporated in the 2021 results and does not change BAM’s outlook for 2021. The Group will publish its 2021 results on 17 February 2022.     

BAM Contractors holds a leading position in the Belgian construction markets for infrastructural and industrial projects for public and private clients. The company has annual revenues of more than € 190 million and approximately 400 employees. Current projects include the Scheldt Tunnel near Antwerp, the railway bridge Genk and the Metro 3 Project in Brussels (connecting tunnel North station).     

Royal BAM Group sees in Stadsbader Group a trusted partner for the future development of BAM Contractors and its employees. The group is restructuring BAM’s portfolio of businesses to focus on markets and projects where it can leverage its proven competitive strengths and serve the growing demand for sustainable solutions in the construction industry. After the successful completion of the divestment of its operating companies BAM Deutschland and BAM Galère, is the intended sale of BAM Contractors another important step in delivering the strategy ‘Building a sustainable tomorrow’.     

The two companies will be operating side-by-side as sister companies allowing the expertise of both to be used for winning mega projects of a complex nature. The timing of this deal is also great as these types of mega projects are upcoming in Belgium (for example the projects related to Oosterweel, Viaduct Vilvoorde and the Brussels Ring Road).    

Motivation 3 

This deal should win the Award as it relates to an important milestone for this Belgian based family-owned business. It results in an important growth (c. +50%) of the Group. It directly impacts the lives of the 400 employees working with the BAM Group by providing continuity. The new Group will also have a very broad skillset in the construction market. Besides the construction and technique BUs, Stadsbader will now also become an important player in the market for large civil infastructure works.      

This deal is the result of the strategical decisions taken at Koninklijke BAM to dispose of their Belgian activities. It required a detailed preparation phase in which the preparation of the stand-alone financials played an important role. Several aspects were important here: (i) the ties with with Dutch HQ had to be cut (ii) a reorganisation was needed to dismantle the Belgian HQ and move key employees to the BAM Contractors perimeter (iii) BAM FM is the facility manager for all BAM operations in Belgium. Meaning all assets (cranes, machinery, etc.) relating to the transaction perimeter needed to be identified and go along in the transaction.  

This was a complex excercise but important to give Stadsbader suffcient comfort on the stand-alone income statement, working capital and net debt.  

What was the deal rationale? 

Next to the elements already mentioned above, the main drivers and rationale for Project Bridge can be summarized as follows:   

• Shared long-term vision and ambition  
• Continuity of existing operations   
• Retention and attraction of personnel   
• Operational experience and knowledge of the market   
• Commercial and operational synergies    

Stadsbader has an extensive know-how and strong presence related to infrastructure projects, construction and techniques. Stadsbader already gradually extended these activities to activities supporting its core-business, such as environmental activities.    

Stadsbader wants to further develop markets where it sees future growth and profitability, such as the civil engineering market. Stadsbader believes BAM Contractors fits in this strategy.     

While Stadsbader is already engaged in civil engineering projects, they are confident that the acquisition of BAM Contractors will accelerate the further development of this market both in Flanders as in Brussels where Stadsbader has been under-represented. Stadsbader has a strong operational focus and values the expertise of all employees of BAM Contractors.     

Stadsbader will consider BAM Contractors as its specialist civil engineering company in the group. Stadsbader aims to integrate its current civil engineering activities in BAM Contractors on the one hand and the infra (=road building) activities of BAM Contractors in the more developed Infra division of Stadsbader on the other hand, realizing a synergy between Stadsbader and BAM Contractors and a win-win for both companies.      

More in particular, Stadsbader counts on the expertise in civil engineering and track of the current employees of BAM Contractors to further develop these activities as a separate company within the Stadsbader group.    

At the same time, the employees of the Infra division of BAM Contractors can contribute to the existing Infra expertise of Stadsbader, will also be challenged and can further develop themselves within the Infra division of Stadsbader.      

Stadsbader believes that a strong regional and local presence is important. The sites of Neder-Over-Heembeek and Sint-Truiden are fully complementary to the current Stadsbader locations.  

Where lies the value creation? 

See previous question regarding deal rationale and value creation.  

Considerable synergies are expected from this deal, both in terms of:  

1. Topline growth through complementary end markets. 
2. Shared services and hence cost optimizations. 
3. Better spread of risk profile across the different types of projects within the group. 
4. Attraction of new personnel in a market hunted by a general war for talent.     

BAM Contractors, within the Stadsbader Group, will continue its activities as a sister company of Stadsbader NV. Both companies will continue to function autonomously, retain their own market and will operate in a complementary manner. Jan Folens will remain in charge of BAM Contractors. The aim of the acquisition of BAM Contractors is to use shared expertise and to further increase vertical integration.  

What is the impact of this deal for the stakeholders?   

For Stadsbader, the acquisition of BAM Contractors perfectly fits within the general strategy of diversifying activities, further growing the group and attract/retain talent. This provides Stadsbader with the opportunity to keep on showing sustainable, profitable growth for employees through a more diverse and broader client base. Moreover, this also frees up more means to continue to invest in innovations, also related to ESG and environmental building.  

For BAM Contractors’ employees, Project Bridge provided stability and job certainty in a family-owned environment after years of uncertainty in a corporate restructuring setting.   

For BAM, this transaction marks a further step forward in delivering its strategy ‘Building a sustainable tomorrow’. BAM is restructuring the portfolio of businesses to focus on markets and projects where the Group can leverage its proven competitive strengths and serve the growing demand for sustainable solutions in the construction industry. 

The divestment of BAM Contractors BV shortens the Group’s balance sheet and reduces liquidity and the use of bonding. The transaction resulted in a limited book loss, which was incorporated in the 2021 results, as published on 17 February 2022.    

What was particular about the deal process? 

Project Bridge has been successfully completed in a very challenging M&A market environment, and buyer/seller managed to overcome a number of challenges along the way.     

BAM Contractors realized significant losses over the past years driven by failed projects leading to a challenging valuation exercise. Moreover, the type of projects executed by BAM Contractors is by nature much larger and risky compared to Stadsbader projects. Also, the challenging general economic situation (amongst others driven by covid-19) led to a cross-border deal characterized by many challenges. This led to a long process (NBO submitted during the summer of 2021, closing May 2022) but successful closing. Having a family-owned buyer engaging in a deal setting with a corporate, listed seller imposed challenges of its own.     

Very particular about this process and sector is the takeover of bonds & guarantees related to ongoing projects within BAM Contractors. Given the nature of larger infrastructure projects, SPVs are made with different partners, for which bonds & guarantees have to be provided. Challenge during project Bridge was the takeover of bonds and guarantees for projects already ended.       

Another challenge related to the structure of BAM Contractors were the numerous carve-in/carve-out elements in the transaction structure. This made financial due diligence (e.g. net working capital) not easy to perform.      

Through a very close collaboration with both M&A advisors (Deloitte on the buy-side, Lazard/PwC on the sell-side), buyer/seller teams and lawyer teams, Project Bridge led to a great outcome for all parties involved. Stadsbader managed to finance and guarantee the transaction through existing lines with the Stadsbader group.  

Do the management or entrepreneurs deserve a special mention?

The track-record of a family-owned company taken over and led by CEO Dominique Valcke has simply been impressive. Stadsbader has always been able to perfectly balance the right risk balance with sustainable profitable growth. Project Bridge is a very nice testimonial of this, as the challenges as described have all been overcome through open and transparent communication along the way.      

The above was also clearly shown by means of the advisory counsel within Stadsbader to challenge evaluations and decisions made throughout the process. This also perfectly balanced with inputs and involvement from the broader management team.      

Also the attitude and skillset of the BAM Contractors management team led by Jan Folens significantly contributed to the successful closing of the deal. Being part of a listed group with lots of corporate restructurings over the past years made it very challenging for them to lead the business. In the end, it was the same mindset and shared values that resulted in this great transaction outcome.   

Bain Capital acquires House of HR from Naxicap Partners

Facts

Involved firms and advisors buy side: EY, Lazard, Latham & Watkins, NautaDutilh,  Kirkland & Ellis
Involved firms and advisors target: Freshfields, Allen & Overy, J.P. Morgan
Involved firms and advisors sell side: Stibbe Brussels (Conny Vandendriessche), Freshfields Bruckhaus Deringer (Management), Edge Avocats (Naxicap Partners), Lydian (Naxicap Partners)

Brief description / Deal outline:
The French private equity fund Naxicap Partners sold its majority stake in House of HR to Bain Capital, one of the world’s leading private investment firms. Bain Capital will hold 55% in the new structure and Naxicap, founder Conny Vandendriessche and House of HR Management will hold the remaining equity.    

This is by far the largest private equity deal in Belgian history to date (more than double the size of the second biggest deal).  

 As a leader in HR services, House of HR places over 57,000 people each month across small, medium and large companies. Started in 1995 with one Accent office in Roeselare, Belgium, House of HR has grown and blossomed into a European group with over 4300 internal employees, €2.2 billion sales in 2021, and offices in Belgium, the Netherlands, France and Germany and recruitment agencies in Poland, Romania, Hungary and Spain, amongst others.   

As one of the top private equity firms in France, Naxicap Partners – an affiliate of Natixis Investment Managers – has € 6 billion in assets under management.      

Why should this deal win the Award for Best Large Cap Private Equity Deal?  

Motivation 1 

The new strategic partnership will maintain the company’s entrepreneurial spirit, help House of HR scale its unique platform into new markets and increase digital investments. The deal values House of HR between € 2.8-2.9 billion, which makes it the largest debt-financed buy-out by a private equity fund in our country.    

As a leader in HR services, House of HR (“HoHR”) represents an appealing investment with a presence across attractive markets, a strong track-record of both organic and external growth underpinned by strong employee ownership which has generated sustained above-market growth for more than 10 years, and a clear strategy to become #1 European provider of specialized HR solutions. By focusing on the specialty staffing sector, HoHR will benefit from multiple attractive long-term trends including significant wage inflation, globalization, labor scarcity, changing skillset requirements and the development of flexible work.  

In 2017, Bain Capital already invested in the sector with the British HR and payroll services group Zellis.     

House of HR intends to continue its growth path, based on strong organic growth combined with targeted and specialized M&A in existing markets, DACH countries and the Nordics. All supported by continued focus on digitisation while maintaining a high standard when it comes to attention to people, both internal employees but also all its candidates.   

Since the first investment by Bain Capital in 2012 in Accent Jobs (now House of HR), the Group has executed 37 acquisitions and has known two CEOs, both of whom were instrumental in the success of House of HR.    

Motivation 2 

This is by far the largest private equity deal in Belgian history to date (more than double the size of the second biggest deal).  

The new strategic partnership will help House of HR scale its unique platform into new markets and increase digital investments.  

Moreover, the deal was extremely complex in the sense that it involved more than 600 managerial shareholders who will sell their stake and at the same time massively reinvest in the company.   

A group of financial institutions has committed to provide a debt financing package in support of Bain Capital’s acquisition of a majority stake in House of HR. The company’s existing Term Loan B, Senior Secured Notes and Senior Subordinated Notes are expected to be refinanced with private, including 2nd lien TLB facilities, and/or public debt financing on terms customary for similar acquisition financings at closing of the acquisition, which is expected to occur by the end of Q4, subject to customary regulatory approvals. In the meantime, EU antitrust approval has been obtained.    

Motivation 3 

• Record-breaking, largest transaction in the Belgian market. 
• House of HR has grown to a recognised European leader in HR services. 
• Bain Capital Private Equity is one of the world’s leading private equity firms.   

What was the deal rationale? 

As a leader in HR services, HoHR represents an appealing investment with a presence across attractive markets, a strong track-record of both organic and external growth underpinned by strong employee ownership which has generated sustained above-market growth for more than 10 years, and a clear strategy to become #1 European provider of specialized HR solutions. 

Naxicap as private equity fund was already invested in House of HR since 2012, it was therefore time for them to sell their stake. However, as Naxicap is a firm believer of the company and wants to continue to contribute to its growth and future development, Naxicap has decided to stay on board as a minority shareholder and reinvest a part of their proceeds.     

At the same time, the 600 managerial shareholders also reinvest massively in the company.      

For Bain, this is a nice addition to their portfolio. 

Where lies the value creation? 

Bain will enable the group to further grow in the coming years. They now have a worldwide PE fund which gives the group further possibilities.      

House of HR has had a substantial organic and external growth since the entry of Naxicap into its capital in 2012 through numerous acquisitions, including in countries like France, the Netherlands, Germany, Spain, Poland and Romania.     

With the support of a worldwide fund like Bain, this aggressive expansion policy can be continued or even accelerated.  

What is the impact of this deal for the stakeholders?   

As mentioned before, more than 600 managers will reinvest and, as a result, will be intrinsically and personally linked to the success of the group.  

As mentioned on its website, House of HR is deeply convinced it has a role to play when it comes to environmental, social and corporate governance (ESG). The group is committed to have a truly positive sustainable impact on the world by staying true to its dream of changing lives, connecting and amplifying boundless talent to win in a world of change. So as to create a long-term sustainable growth, House of HR applies a strict focus on environmental, social and governance issues. Set up in 2020, this ESG-process has to develop an elaborated sustainability strategy and governance, supported by the expertise of an external expert.    

First, House of HR has defined its four key stakeholders, being the groups of people, organizations and channels who will be impacted and involved in the ESG story. The stakeholders defined are, in this order, first all employees, and second all customers who include clients, prospects, candidates, consultants, and temp workers. Thirdly are investors, shareholders, and financial institutions. Finally House of HR also aims to involve education institutions, training centers and the general public by social media.  

In the near future, a structured process will be rolled out to regularly consult the stakeholders. As such, House of HR wants to stay informed about what really impacts them.       

Another important aspect of House of HR’s role in society is the integration of the UN Sustainable Development Goals (SDGs). These goals deal with aspects such as gender equality, health and wellbeing, education and reduced inequality. House of HR also has an ESG Charter which can be found on their website for the purpose of aligning with such sustainable development goals.  

• House of HR has a multi-brand strategy stimulating local entrepreneurship to serve specialized markets allowing it to be one of the most growth-focussed and profitable platforms in the world.   
• House of HR continuously looks for new opportunities to invest in companies that can complement the House of HR offering, in terms of either industry specialization (e.g. healthcare, IT, public sector), candidate focus (e.g. engineering, legal, financial) or geographic spread.   
• House of HR’s focus on digital solutions for both candidates and customers helps meet workers’ increased demand for flexibility. House of HR is known for its market leading digital solutions, such as NOWJOBS (fully digital matching platform for students and flexworkers), SWOP, Gighouse and Book’u. 
• House of HR: “We intend to continue our growth path, based on strong organic growth combined with targeted and specialized M&A in existing markets, DACH countries and the Nordics. All supported by continued focus on digitisation while maintaining a high standard when it comes to attention to people, both internal employees (our Happy Rebels) but also all our candidates.”   
• Bain Capital: “We have been impressed by HoHR’s specialized business model, underpinned by strong employee ownership which has generated sustained above-market growth for more than 10 years. This combined with a unique track-record of successful M&A in this sector, which we look forward to accelerating. We’re pleased to be embarking on this partnership, with Naxicap and Conny Vandendriessche both keeping their wealth of expertise in the business.” 

What was particular about the deal process? 

As mentioned and as can be expected for a deal of this record-breaking size, the deal was extremely complex, involving private equity funds on both sides, more than 600 managers-shareholders, the target group being active in 10+ European countries, deal requiring EU antitrust approval, a complex equity and debt financing structure and finally involving complex and detailed management incentive schemes which take into account the personal tax situation of managerial shareholders spread out across Europe.  

Do the management or entrepreneurs deserve a special mention?  

House of HR is a management-driven business which is evidenced by the more than 600 managerial shareholders, under the leadership of one of the most successful Belgian entrepreneurs of the last decade, Conny Vandendriessche, and its dynamic CEO Rika Coppens.  

Prophix acquires Sigma Conso from Fortino Capital Partners

Facts

Involved firms and advisors buy side:
Financial: Deloitte  
Legal: Eubelius, Skadden, Blakes  
Tech: Palo Alto Strategy Group  
Customer interviews: EY  
Debt financing facilitation: J.P. Morgan  
Involved firms and advisors target: N.A.
Involved firms and advisors sell side: N.A.  

Brief description / Deal outline:
Sigma Conso, a European leader in financial consolidation software was bought by Prophix, a Canadian financial planning software to create a global leader in Corporate Performance Management SaaS software serving the mid-market. 

 Why should this deal win the Award for Best Large Cap Corporate Deal?
Sigma Conso, a financial consolidation and reporting software company out of Anderlecht, was sold to Prophix, a Canadian financial planning and budgeting software company, in October 2021. Sigma Conso got acquired by Fortino Capital Partners in June 2020. Prophix got acquired by Hg in February 2021.     

After a relatively short, though intense collaboration between Sigma Conso and Fortino Capital, this was the right moment for both Sigma Conso and Prophix to team up to become a broad suite “Office of CFO” software company, globally serving mid-market customers.     

The rationale of the deal was clear for all stakeholders involved (Sigma Conso, Prophix, Hg and Fortino Capital): 

1. “Office of the CFO “software is a hot market, notably during uncertain periods like Covid, notably the strategic corporate performance management segment.   
2. The geographical complementarity allowing both companies to cross-sell their products globally. 
3. The product complementarity allowing to complete each others’ product suite (both financial consolidation and reporting combined with financial planning and budgeting). 
4. The same customer focus, both focused on mid-market customers, serving >2,200 customers together in North-America, Europe and South-East Asia   
5. Hg is known for its value accretive buy-and-build, hence the Sigma Conso’s shareholders (management) who (partially) rolled over, firmly believed in the future value creation potential upon joining forces. 
6. Strong cultural fit between both companies, immediately acknowledged by management teams in all mutual discussions ahead of the deal.    

Despite the short partnership between Sigma Conso and Fortino Capital of somewhat more than a year, Sigma Conso really transformed during that period: 

1. Board got completed by very senior profiles with international software experience (cfr infra). 
2. Management got reinforced by CFO, VP sales and Head of services. 
3. Acquired its South-East Asian reseller, who was also reselling Prophix. 
4. Increased recurring revenues from € 4.2 million in 2019 to ~€ 8 million end of 2021, while overall revenues increased from € 8.2 million to ~€ 12 million by end of 2021, in a profitable way. 
5. Entered the German market to further claim European market leadership, while planning to also open Nordics soon. 

One of the growth pillars for Sigma Conso during the partnership with Fortino Capital was inorganic growth, hence the acquisition of the reseller in Singapore. Also on the product side, Sigma Conso was very eager to acquire its own financial planning and budgeting tool as it felt in the market it would have a stronger position than only offering financial consolidation and reporting software. For this purpose, Sigma Conso and Fortino spoke with many targets in the market. However the best fit product-wise was seen in Prophix, but that company was just acquired by Hg, and 3-4x larger than Sigma Conso. At the same time, both Prophix and Hg also acknowledged the great fit. Hence, what a priori was a search for add-on product for Sigma Conso, became a strategic discussion where Prophix showed strong interest in buying Sigma Conso.      

Given the great fit, this ended up being a fast exclusive process without any M&A advisor, where the deal execution took less than 3 months over summer 2021.      

The companies immediately integrated the product and commercial organizations to focus on joint value creation from the start after the deal closing, and Sigma Conso’s CEO became Senior Vice President Corporate Development for Prophix Group as part of the Executive Committee.      

Today, Prophix, after the acquisition of Sigma Conso, is a group of > € 40 million revenues, employing >450 FTEs, serving over 2,200 customers with clear aspiration to grow further into a true corporate performance management software leader for mid-market companies, backed by Hg.     

All-in-all, what started as a consolidation service company in 2002, with Dominique Galloy joining in 2006 as CEO and owner who turned Sigma Conso in a leading financial consolidation software vendor in Europe and Asia, with help of Fortino accelerating its success since 2020, ended up into a global partnership, where Sigma Conso is now able to service mid-market customers globally with its leading-edge consolidation offering, as part of a global group offering the full suite of corporate performance management solutions to the mid-market.  

What was the deal rationale?
Prophix was acquired by Hg in February 2021. Prophix is a Canadian software company with focus on financial planning (forward looking) on North-American market, serving 1,600 customers in mid market.      

Sigma Conso was acquired by Fortino Capital in June 2020. Sigma Conso is a Belgian software company with focus on financial consolidation and reporting (backward looking) on European and South-East Asian markets, serving 650 customers in mid market.      

There are three levels of complementarity that drove the deal rationale:   

1. Product complementarity: consolidation & reporting software (backward looking) along with budgeting and planning (forward looking).  
2. Geographics complementarity: Europe + Asia & North-America.  
3. Customer focus: both companies focus on mid-market customers, not the large enterprise customers where many other software vendors are focusing on.    

One additional element that contributed to fast conclusion of the deal was cultural fit.  Both companies and its CEOs had really good fit during the strategic discussions leading up to the deal, giving them the feeling that both strategy and company cultures would really work well together.     

Based on this, all stakeholders involved in the deal felt this was a great match and even though it was early in the journey of Fortino / Sigma Conso, it was considered the right thing to allow Sigma Conso to offer its product suite worldwide, through this partnership with Prophix, and to be part of a company with global leadership aspirations.  

Where lies the value creation?
Since Fortino came on board in June 2020, Sigma Conso drove value creation across many fronts: 

1. Recurring revenues evolved from  €4.2 million in 2019 to € 8 million by end of 2021; overall revenues evolved from € 8 million in 2019 to € 12 million in 2021.   
2. Sigma Conso reinforced its board with Patrick Van Deven (former EMEA head of C3.ai), Edouard Fourcade (former EMEA head of Anaplan) and Jean de Crane d’Heysselaer (CEO Isabel Group). 
3. Sigma Conso professionalized its management, as up till then Dominique as CEO was acting as CEO, VP Sales, CFO and Head of Services combined. Sigma Conso hired a CFO, VP Sales, and internally promoted a Head of Services, within 3 months after the entry of Fortino Capital in June 2020.  
4. Sigma Conso entered the German market at start of 2021 and had plans to open Nordics to increase its European coverage further.   
5. Sigma Conso acquired its reseller in South-East Asia in May 2021, this reseller was already a reseller of both Prophix and Sigma Conso, indicating the great compatibility of offering both products at once as part of the “Office of CFO” suite.   
6. On the product level, Fortino’s team helped the company to set up proper product management and reduce the development cycles from over several months to 6 weeks adopting the agile way of working.   

What is the impact of this deal for the stakeholders?
Given the complementarity of the companies (cfr. supra), the impact for key stakeholders is to be value accretive.    

1. Customers: Prophix and Sigma Conso as a group will have holistic software offering on both historical financial reporting (Sigma Conso suite) and future financial planning and budgeting (Prophix suite).   
2. Employees: as Prophix is mainly active in North America and Sigma Conso in Europe and South-East Asia, the teams will be organized across regions, cross-selling the entire group product suite.   
3. Management: Dominique Galloy, CEO Sigma Conso, joins the Executive Committee of Prophix and will be responsible for Corporate Development worldwide.      

What was particular about the deal process?
The exit process was a 1-to-1 exclusive process, without M&A advisor, where the Hg and Prophix teams worked closely with the Fortino and Sigma Conso teams to close the deal in less than 3 months (over summer from mid-July 2021 up till early October 2021).       

Do the management or entrepreneurs deserve a special mention?
Special mention for Dominique Galloy, who has been the owner and CEO of Sigma Conso since 2006, having bought a majority of the company from Allen White. Allen White is a financial consolidation guru, who set up Sigma Conso to deliver consolidation services to its customers in 2002. Dominique came on board in 2006 and has transformed the company from a service company into a cloud-based software company, serving customers in 27 countries in Europe and Asia. The company is completely bootstrapped and generated profitable growth with ~20-25% growth per year.  

Collibra

Facts

Involved firms and advisors buy side: Linklaters LLP, Stibbe (CapitalG)
Involved firms and advisors target: Cleary, Gotlieb Steen & Hamilton LLP
Involved firms and advisors sell side: N.A. 

Brief description / Deal outline:
Collibra raised USD 250 million in a series G capital round to hit a valuation of above 5 billion, making it the first Belgian pentacorn. The funding round was led by leading international investors Sequoia Capital Global Equities and Sofina, along with participation from new investor Tiger Global Management and existing investors Battery Ventures, CapitalG, Alphabet’s investment arm, Dawn Capital, Durable Capital Partners LP, ICONIQ Capital and Index Ventures.  

Why should this deal win the Award for Best Venture Capital Deal? 

Motivation 1 

The funding round of Collibra is unique in the Belgian market for many reasons (not only due to its size) and again proves that Collibra is one of the most successful tech companies founded in Belgium.     

Collibra is a Belgian data governance company which was co-founded in 2008 by Felix Van de Maele, the current CEO, while he was still studying at the University of Brussels. Collibra started as a spin-out from the University of Brussels, after which it steadily grew to become the industry leader and reference in the field of data governance. From its operational headquarters in New York City, Collibra delivers an end-to-end data intelligence platform to its customers.   

Since Collibra’s inception in 2008, the demand for data governance solutions has grown exponentially as society in general has become more data driven. Collibra has been able to capitalise on this increase in demand, and today, more than 500 customers (including 7 of the 10 largest pharmaceutical companies, 70% of the largest U.S. banks, and several of the world’s largest retailers) worldwide use its data intelligence cloud platform to find meaning in their data and strengthen their decisions.  

Collibra is unique, as it is the only company in the industry that provides a single, fully integrated cloud-native platform to enable customers to accelerate their digital transformation journey.   

In order to fund its growth, Collibra has attracted nearly USD 600,000,000 from investors since 2008. Investors include some of the most prestigious and leading VC firms in the world such as Sequoia Capital, Index Ventures, Battery Ventures and CapitalG. The backing from these investors led Collibra to a unicorn status in 2019, as the first Belgian company ever.    

Given its long-term investment horizon and it willingness to support fast growing companies, Sofina proved to be the ideal partner for Collibra.  
After having acquired a small stake in Collibra in 2020, the Series G funding round of the company was the ideal moment for Sofina to increase its stake. Together with Sequoia Capital, Sofina became the lead investor of the USD 250 million Series G funding round.  The Series G funding round valued the company at USD 5,25 billion, more than doubling the company’s valuation announced in April 2020. The USD 250 million was the biggest funding round of a Belgian company in 2021 and confirmed Collibra’s status as the Belgian private company with the highest valuation.   

Harold Boël, CEO of Sofina, said: “Collibra is a high-growth, cloud-native organization and one of the most successful tech companies founded in Belgium. The company’s success is testament to the strength of the Belgian tech ecosystem and we are happy to continue our long-term partnership with Collibra. Against a shifting market landscape, Collibra remains highly differentiated with its cloud platform and robust ecosystem, allowing it to expand its market leadership.”   

Motivation 2 

• Through this transaction, Collibra becomes the first Belgian Pentacorn (in 2019, Collibra became the first unicorn following a capital raise).   
• Through this transaction, Collibra will further accelerate its international growth and expand breadth and depth of the ecosystem.   
• Media coverage.  
• Significant deal value. 

What was the deal rationale?
The additional raised capital will be used by Collibra to:   

• Advance Collibra’s platform roadmap: Collibra will continue to enhance its Data Intelligence Cloud, a single system of engagement for data. As a cloud-native SaaS platform, Collibra uses an edge-cloud architecture, open APIs and graph metadata analytics technology to easily connect to modern data sources, business applications, data science and BI tools in one central location.    
• Expand the breadth and depth of the ecosystem: leading technology partners such as AWS and Google Cloud already see Collibra as the partner of choice for data governance, catalog, lineage and privacy solutions and have become increasingly supportive of Collibra Data Quality. Collibra will expand existing partnerships in their ecosystem, including platform and solution providers AWS, Google Cloud, Snowflake, and Tableau.   
• Accelerate Collibra’s global footprint: to support company growth, Collibra will be expanding its presence globally and hiring in key areas including engineering, sales, customer success and product. Collibra expects to double the size of its global workforce by 2023.   

Where lies the value creation?
Since its last funding round in 2020, Collibra has experienced rapid growth and customer traction, accelerating international expansion across key verticals including financial services, government, manufacturing and healthcare internationally helping to drive record performance in 2021. This led to the company’s valuation more than doubling to USD 5,250,000,000.  

What is the impact of this deal for the stakeholders?
The funding round will allow Collibra to expand its platform and continue its mission to change the way organizations use data — with the belief that governed, accessible, and trusted data has the power to change things for good.  

What was particular about the deal process?
As Collibra is currently seeing overwhelming demand for its platform from the investor community, the deal terms were very competitive and the deal needed to be negotiated within a very short timeframe.  

Do the management or entrepreneurs deserve a special mention?  
Management, led by Felix Van De Maele, deserves a special mention as they founded Collibra as a local start-up in Brussels and have grown the business to become the most valuable Belgian unicorn and one of the leading Belgian tech companies and success stories. 

Precirix

Facts

Involved firms and advisors buy side: 
Financial & tax: Deloitte Audit and Assurance and Deloitte Global Business Tax
Legal: Deloitte Legal
Involved firms and advisors target: Freshfields Bruckhaus Deringer
Involved firms and advisors sell side: N.A. 

Brief description / Deal outline:
The transaction regards the Series B Investment in Precirix NV by a syndicate of new investors and a number of existing shareholders for an aggregate amount of € 80 million, being the largest investment round in a Belgian biotech company in 2022.  

Why should this deal win the Award for Best Venture Capital Deal? 
Precirix is a private, clinical-stage biopharmaceutical company founded in 2014 as a spin-off from the VUB, dedicated to extending and improving the lives of cancer patients by designing and developing precision radiopharmaceuticals, using camelid single-domain antibodies labelled with radioisotopes. The company has a broad pipeline with one lead product candidate CAM-H2 in a Phase I/II clinical trial and two in advanced preclinical stage. Research on multiple isotopes, linker technology and combination therapies further expand the platform. Precirix’s technology also allows for a theragnostic approach, where patients can be selected using a low dose/imaging version of the product, followed by a therapeutic dose for treatment.  

The study allows inclusion of patients with brain metastases, a population in urgent need of effective therapies. Initial imaging data provide confidence in the potential of CAM-H2 to address the unmet medical need in this population. Patients are now being enrolled in the second cohort of the dose-escalation phase, following the absence of any dose-limiting toxicities in the first cohort and a positive review from the Safety Review Committee.  

What was the deal rationale?
The proceeds of this financing round will fund the development and expansion of Precirix’s pipeline and, more specifically, will advance the product candidate through its ongoing Phase I/II study and plans to bring additional novel radiopharmaceuticals to the clinic. Precirix will also focus on further strengthening the platform, using its potential to generate new product candidates, linkers and CMC processes. 

Where lies the value creation?
This deal introduces strong investors in the healthcare sector which will drive Precirix’ growth.  

As put by Ruth Devenyns, CEO of Precirix: “We are delighted to announce this major milestone and are grateful for the strong investor support. The addition of Inkef, Jeito and Forbion, three leading VC funds in the healthcare sector, significantly reinforces our international shareholder base. The investment will allow Precirix to accelerate its growth trajectory and to further validate and broaden the technology platform.”  

What is the impact of this deal for the stakeholders?
Simone Botti, Partner at INKEF Capital, Sabine Dandiguian, Managing Partner at Jeito and Jasper Bos, General Partner at Forbion Growth will join Precirix’s board of directors.  

Simone Botti, Partner at INKEF Capital said: “Radiopharmaceuticals are showing great promise as therapies for difficult-to-treat cancers. Precirix’s innovative platform based on sdAb carriers has potential to truly improve clinical outcomes for patients. We are excited to support Precirix on its continued progress advancing first-in-class targeted radiopharmaceuticals towards commercialization.”  

Sabine Dandiguian, Managing Partner at Jeito Capital said: “We are thrilled to co-lead this round with the ambition to support Precirix in bringing a breakthrough new alternative to patients suffering from advanced cancer, in total coherence with Jeito’s mission: ‘Go faster for the patient, further with the entrepreneur’.”  

Jasper Bos, General Partner at Forbion and working in the company’s Growth Fund, noted: “Forbion Growth was launched with the aim to build a portfolio of 10-12 investments in the most promising European late-stage life sciences companies. Precirix exemplifies the type of company we invest in within the fund. I am confident of our ability to enable the team to build and transform patients’ lives.”  

The company’s existing shareholders Gimv, HealthCap, Novo Holdings, Pontifax Venture Capital, V-Bio Ventures, BioMed Partners, as well as the seed investors, continue to support the company having all participated in this investment round. 

What was particular about the deal process?
The negotiations and transaction process were run, for a large part, during Covid-19 times. As Belgium was imposing travel restrictions on incoming travelers, the representatives of the Investors’ syndicate weren’t able to physically visit Precirix’ premises or meet the management of Precirix in person, throughout the transaction.

Do the management or entrepreneurs deserve a special mention?  
The CEO of Precirix, Ruth Devenyns, was involved from the Series A financing round and led the company from an early-stage spin-off, through the first stages of clinical trials, to one of the most valuable and promising companies in the Belgian biotech landscape.