France Invest (The French Private Equity professional association) and INUO Strategic Impact, a strategy consulting firm, present the findings of a joint survey on the outperformance of companies that have opened a majority stake of their capital to investment funds.
“This study is above all testimonials from leaders. Ultimately, they are the best ambassadors for private equity. Their backgrounds make it possible to dispel certain received ideas, certain fears and are even valuable advice for business leaders who are tempted to open their capital to a fund "comments Dominique Gaillard, President of France Invest.
"Little is known about it: many French success stories have been supported in the acceleration of their growth by a succession of private equity funds. In our study, which measures their growth and performance compared to their peers, which remain family or private businesses, managers speak up. They explain the contribution, financial and extra-financial, of funds that have enabled them to become, in a decade, international mid-size companies and champions in their sector. »Comments Chiheb Mahjoub, President of INUO Strategic Impact.
A detailed analysis of 28 French companies from all sectors, mostly family SMEs at the outset, which, for the most part, opened the majority of their capital to funds between 2009 and 2019, i.e. over a sufficiently long and interesting period, between two crises, highlights:
- Outperformance compared to competing family companies
- These companies have grown faster than their competitors, increasing their turnover by an average of 14% per year, compared to 8.5% for their competitors.
- 75% have improved their operating margins and 64% have higher operating efficiency than their competitors.
- A valuation of the support provided by investment funds
- The leaders value the support of funds which, beyond capital, have provided them with strengthened governance, new financing capacities, financial expertise, increased credibility, advisory support, the dynamics of sparring partner and professional networks and contacts.
- Executives testify to the funds' contribution as an accelerator of organic and external growth, and in particular as a powerful support for acquisitions abroad.
- A change in the capital structure with a rise in families and managers
- Over the course of the inflows and outflows of funds, the trend is for families and shareholder managers to increase their capital, who have again become the majority in more than 20% of the companies analyzed.
Among the 28 companies analyzed:
Céva: 5th global company in animal health
Cerba : A leading European firm in medical biology
Colisée : 4th largest operator in Europe of retirement homes and home care services for seniors
Gerflor: one of the world leaders in the production and distribution of floor and wall coverings
Loxam: leader in France and Europe in equipment rental
Mademoiselle Desserts: European leader in frozen industrial pastry
Click Here To See The Interview (the interview is in French).