LBO

A growing number of companies are undergoing leveraged buyouts in conjunction with a takeover. This is often adopted both by family-owned companies who do not want to be part of an industrial group, and by subsidiaries of groups, who see the buyout approach as a powerful means to foster growth and accountability.

Since 1997, AXA Private Equity has been one of the most active players in this market segment and as of today had closed 40 buyout transactions in France and Germany. Now that we have opened an office in Milan backed by a local team of dedicated professionals, 3 of the leading European buyout markets, which are highly interconnected, and are managed directly by our local staff.
 

Approach

• Investment in profitable high-potential companies in order to bolster growth and earnings in new markets.
• Investment decisions are taken by an investment committee comprising the AXA Private Equity Management Board and the Buyout team. Its key strengths when bidding in very rapid and standardized auctions for companies are speed of reaction and local presence.

Methodology

• Identify high-performing companies or with potential to be so in the near future.
• Intense negotiations for AXA Private Equity to buy an equity stake.
• Establish a financing scheme which does not hamper the company’s development.
• Apply strategy to create value: mergers and acquisitions, sale of non core businesses, refocusing of growth strategies (e.g. distribution, R&D, etc.), and, if applicable, management changes.
• Consider the best opportunities for an exit such as an industrial buyer, IPO, new buyout transaction etc and how the corporate strategy fits with a potential change in shareholders in the future.

Criteria

• Investment in companies valued between 100 millions € and 2 billions €.
• Generally a controlling interest.
• No sector preference excluding real estate, financial services and so-called sensitive sectors not covered by AXA Private Equity pursuant to our Socially Responsible Investor commitments such as defence, tobacco etc.
• Capacity to invest up to 250 millions € per transaction and up to 500 millions € with the fund’s co-investors.