Buyout Investments

Champeau

Activity

Founded in 1929 and with revenue of €45m in 2002/2003, Champeau group is number 1 in France for timber roof frames (sometimes known in French as "fermettes"). The main outlet for the Champeau group is the area of private housing. Every year there are between 190,000 and 200,000 individual houses built in France of which around 70% are built using the "fermette" type of frame (and the remainder using more “traditional” roof framing). Champeau group manufactures around 17,000 industrially produced roof frames per year, i.e. a market share of approximately 12-13%.
Being part of the SAE (Eiffage) group for 10 years led to strict management methods and reporting systems. Champeau group runs 9 production sites mainly in the centre and the south-west of France. The group’s main customers are house builders (both regional and national), tradesmen, property developers and public sector companies.
In January 2004, Champeau group joined up with the Gau group, a major player in the Midi-Pyrénées and Languedoc-Roussillon areas of the country bringing 3 extra production sites on board (Castres, Carcassonne and Tavel).

Context

Until now the Champeau group has been wholly owned by two families. Mr Champeau felt he wanted to involve current management more fully in the future growth of the group and also to prepare his own succession and so he looked to sell out to a financial investor. After an open tender process, AXA Private Equity Fund II was selected to accompany management in an LBO transaction.

Strategy

The group’s target is to reach revenue of around €90m-€100m by 2007 with operating profit of at least 10%. In order to achieve this, geographic coverage of France will continue with the opening of new production sites or by company acquisitions. Developments in Spain are also on the cards.
AXA Private Equity Fund II contributes to the creation of value by assisting the management team in its M&A policy. A first transaction was concluded in January 2004 with the acquisition of a major regional group, boosting the revenue of the new entity to around €60m. Other build-up operations are under review.

Divestment

In November 2004, after a partnership that helped the group to achieve growth organically and via acquisitions, in particular through the merger with the Gau group in January 2004, AXA Private Equity passed over control of the group to the management team headed up by Jean-Pierre Champeau and Max Gau. The pool of investors was completed by private shareholders and Spef Développement who bought into the Champeau-Gau group equity with a stake of 20%. Financing for this OBO (Owner Buy-Out) was ensured by KBC.