Deloitte, EY, Indefi and EY-Parthenon advise on French private equity deal

05 July 2018 Authored by Consultancy.eu

French investment company Eurazeo PME has become the new majority shareholder of ST Group. Holding approximately 60% of the share capital, the private equity company has rebranded the company as Vitaprotech and crafted ambitious growth plans for the years to come.

ST Group was established in 2014 following the merger of Sorhea and TIL Technologies. The latter company was founded in 1988 in Aix-en-Provence, and at the time of the merger held a 20% share in the market for software services for access control systems of critical sites. Sorhea was born in 1987 close to Lyon, and is a provider of high performance infrared barriers, aimed at helping organisations detect physical intrusions nearby sensitive areas. The group works mainly for clients in the power & utilities, prison, public safety, defence and logistics sectors. 

Under the belt of UI Gestion, a small cap investor which came on board as part of the merger, ST Group has seen rapid growth. The company grew in France, and embarked on an internationalisation path – today the firm boasts operations in three foreign countries (United States, Canada, Belgium), with the international activities representing a 22% share in ST Group’s portfolio. 

“Growing the firm from a turnover of €9 million into a group that's now worth nearly €30 million and boasts an international presence... this was an exciting adventure for our team,” reflected Olivier Jarrousse, Managing Partner of UI Gestion. He added that passing the baton on to Eurazeo PME was a carefully shaped move, one that is “aligned with our ambitions as investors.”Deloitte, EY, Indefi and EY-Parthenon advise on French private equity dealEurazeo PME is a listed investment company with nearly €5 billion in assets. In parallel with a commitment to invest €40 million in the company, the new majority shareholder foresees lifting the company to the next level. Joanne Dubail, Principal at Eurazeo PME, explained: “We are committed to transforming this national champion into an integrated and global midcap company, and channel all our expertise to nurture its future growth. Acquisitions will definitely be an important lever.” 

The President of Vitaprotech – ST Group’s new name – Eric Thord said in response to the deal; “This is another major step towards developing our group. Alongside Eurazeo PME, my ambition for the group is to move up to a new dimension, firstly by capitalising on the synergies between Sorhea and TIL Technologies businesses, around a unique value proposal for securing sensitive sites, and secondly by structuring an ambitious approach to building international leadership.” The President further hinted at the fact that Vitaprotech will launch a range of new products and services and allow for the implementation of external growth operations. 

The main market Vitaprotech operates in, solutions for detecting intrusions around sensitive sites, is estimated to be worth around €500 million worldwide. However, Dubail says, the industry is highly fragmented, with the largest player holding a share of just 6%. “There is great potential.” The broader market the firm operates in, software services for access control systems (the focus of TIL Technologies), is much larger, estimated to be worth about $5 billion worldwide. Although competition is intense, from players such as Honeywell, Vitaprotech finds itself in a niche, a positioning that Dubail believes could form the basis for double-digit growth.

The transaction between the two private equity firms was supported by M&A advisors from several external consultancies. The Transaction Services arm of EY provided financial due diligence services, alongside Deloitte Transaction Services at the other side of the table. EY-Parthenon, formerly OC&C Strategy Consultants in France, was called in for sell-side strategy consulting, while Indefi provided commercial due diligence expertise to the buyer. To cover the digital side of the due diligence, a team from Digital Security (a subsidiary of Econocom Group) was brought on board. Other firms that supported the deal (of which financial details have not been disclosed) include law firms Lamartine Conseil, Desfilis, Noésis Avocats, Satec, Orsan and Thémis.

Dealmakers involved with a background in the consulting industry:

- EY Transaction Services: Emmanuel Picard, Guilhem de Montmarin, Constance Hauville, Vincent Magaud
- Deloitte Transaction Services: Philippe Serzec, Noemie Gaillard, Antoine Azria, Jean-Gaël Chaize
- EY-Parthenon: Stéphan Bindner, Louis Ravier, Ludovic Chatoux
- Indefi: Julien Berger, Mehdi Belefqih, Adam Laissaoui, Youssef Chtourou, Nicolas Vincent, Thelma Hebbar
- Digital Security: Thomas Gayet, Alexandre Ahmim-Richard, Guillaume Jolicart

Strategy consultancy, including commercial M&A services, is worth around one fifth of France’s €6.5 billion management consulting industry.

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