PSP Investments and NPS Co-Invest With BC Partners on €1 Bn Havea Acquisition
BC Partners is set to buy a European natural healthcare business in a deal that is understood be valued at just over €1bn.
The private equity group has entered into exclusive discussions to acquire a majority stake in Havea, a French natural healthcare company serving the European market, from 3i Group.
The deal has been led by BC Partners and is in partnership with PSP Investments and National Pensions Services Investment Management (NPS).
BC Partners said it would look to “accelerate its pace of M&A with complementary businesses, and continue investing in digitalisation”.
Havea currently employs over 800 people, and is headquartered in Boufféré, France.
The company manufactures, designs and distributes products ranging from functional and natural food supplements, to natural personal care products for babies and women.
3i invested in Havea in 2017, completing five acquisitions in five years and expanding activity in Italy and Belgium.
Completion of the deal remains subject to the information and consultation of the employees’ representative bodies of Havea and to customary regulatory and antitrust approvals.
The transaction would be expected to close by Q4 2022.
Emma-Victoria Farr of Reuters also reports BC Partners acquires Havea for $1.16 bln:
London-based private equity firm BC Partners has acquired French natural healthcare group Havea from 3i Group for 1-1.1 billion euros ($1.05 - $1.16 billion), a source familiar with the matter told Reuters.
BC Partners led the investor group in partnership with PSP Investments and National Pensions Services Investment Management (NPS). The bidder intends to accelerate Havea's pace of M&A and continue investing in digitalisation.
"The business has made five key strategic acquisitions since 2017, and we look forward to working with the team to drive Havea's continued international expansion," said Fouad Jaïdi, managing director at BC Partners.
Proceeds to 3i will represent around 50% uplift to its 31 March valuation. Havea, which owns brands such as Aragan, Biolane and Vitavea, employs over 800 people and is headquartered in Boufféré, France.
Last week, PSP Investments put out a press release on this deal:
Funds advised by BC Partners, a leading international investment firm, announced today that they have entered into exclusive discussions to acquire a majority stake in Havea, the French leader in natural healthcare serving the European market, from 3i Group. Terms of the transaction were not disclosed.
This new partnership will support Havea’s best-in-class management team to execute its strategy of strong organic growth, empower it to accelerate its pace of M&A with complementary businesses, and continue investing in digitalisation.
Havea is a leading French natural healthcare group with a major presence across Europe: The Company’s five key Strategic Brands hold market-leading positions in their respective categories. The business has a history of consistently delivering above-market organic growth as a result of a focused strategy tailored to each brand, with strong underlying cash flow generation. It currently employs over 800 people, and is headquartered in Boufféré, France.
Mark Hersee, Partner at BC Partners, said: “Havea benefits from long-term structural tailwinds, and embodies the key themes that we look for in a healthcare business, particularly in pharma, of providing strong value to patients and healthcare payors alike, preventative care, and digitalisation. Havea has an outstanding track record of delivery, true market leadership, and a best-in-class management team, which are key criteria we seek in our investments. We look forward to working with the management team in realising the full potential of the Group.”
Fouad Jaïdi, Managing Director at BC Partners, said: “Consistent with our owner-operator mindset, we are excited to help Nicolas Brodetsky, CEO of Havea, and his team execute on their strategy and support them in pursuing value accretive transactions. The business has made five key strategic acquisitions since 2017, and we look forward to working with the team to drive Havea’s continued international expansion. We will use our expertise to support the company’s continued focus on meeting customer needs via increased investment in digitalisation.”
Nicolas Brodetsky, CEO of Havea, said: “We welcome this opportunity to partner with BC Partners, which has extensive experience in fostering portfolio companies’ potential and will support us in this next and exciting stage of our growth, with a continued focus on improving our consumers quality of life with natural products. We share a common vision of the winning strategy to accelerate our development on a larger scale and become the undisputed European leader. We thank 3i for their active support, which has helped Havea grow and establish its leadership position in natural healthcare.”
David Morin, Managing Director and Head of Europe, Private Equity at PSP Investments, said: “Over the last years, Nicolas Brodetsky, CEO of Havea, and his talented team have built great brands and have positioned Havea to benefit from industry tailwinds. We are excited to team up with BC Partners, who have been one of PSP Investments’ core partners for many years. Together, we will provide the long-term strategic capital to support Havea in achieving its full potential through its next phase of development as a European leader in natural healthcare.”
About BC Partners
BC Partners is a leading investment firm with over €40 billion in assets under management across private equity, private debt, and real estate strategies. Established in 1986, BC Partners has played an active role for over three decades in developing the European buy-out market. Today BC Partners integrated transatlantic investment teams working from offices in Europe and North America and aligned across our four core sectors: Healthcare, TMT, Business Services & Industrials, and Consumer. Since its foundation, BC Partners has completed over 120 private equity investments in companies with a total enterprise value of over €160 billion and is currently investing its eleventh private equity buyout fund.
For further information, please visit https://www.bcpartners.com/
About PSP Investments
The Public Sector Pension Investment Board (PSP Investments) is one of Canada’s largest pension investment managers with C$230.5 billion of net assets under management as of March 31, 2022. It manages a diversified global portfolio composed of investments in public financial markets, private equity, real estate, infrastructure, natural resources and credit investments. Established in 1999, PSP Investments manages and invests amounts transferred to it by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Headquartered in Ottawa, PSP Investments has its principal business office in Montréal and offices in New York, London and Hong Kong.
For more information, visit investpsp.com or follow us on Twitter and LinkedIn.
About Havea Group
Created in 1975 and headquartered in France (Boufféré / Paris), Havea is a leading European natural healthcare player dedicated to quality of life enhancement by empowering consumers to take care of their health using natural and organic products. Through its 5 Strategic Brands (Aragan, Biolane, Densmore, Dermovitamina and Vitavea), Havea designs, manufactures and distributes a wide range of products from functional and natural food supplements, to natural baby premium healthcare products. In 2021, Havea employed 800 staff and generated € 212m sales.
This deal caught my attention last week as it represents a nice co-investment for PSP Investments with BC Partners, a strategic partner in private equity.
South Korea's National Pensions Services Investment Management (NPS) also co-invested alongside BC Partners and PSP Investments on this acquisition of Havea, a leading French natural healthcare company serving the European market.
The transaction values the company at just over €1bn and it is expected to close in the last quarter of the year.
Havea, which owns brands such as Aragan, Biolane and Vitavea, employs
over 800 people and is headquartered in Boufféré, France.
The press release states that it generated €212 m sales in 2021.
According to a French article published late last year, Havea is looking to become the European leader in the natural health products space in four years and wants to increase its sales to €300 m by 2025.
It couldn't have picked better partners to help it expand its international presence as BC Partners is a top European private equity fund and both PSP and NPS will provide long-term strategic capital and more to support the company achieve its full potential
In particular, the press release states that BC Partners will look to “accelerate its pace of M&A with complementary businesses, and continue investing in digitalisation” to drive Havea's international growth.
Now, I can't talk much about South Korea's National Pensions Services Investment Management because I don't them well enough (they're a huge global fund) but PSP Investments' Private Equity team I do know fairly well.
I recently went over PSP's fiscal 2022 results with Neil Cunningham, its President and CEO, where he said this about their Private Equity investments:
Private Equity, you see in the numbers, we reset that strategy seven years ago and the 1 and 5-year returns really reflect how successful that team has been in the reset strategy and I give them full credit for doing that.
[The reset strategy] was under new leadership. Simon Marc is running that group globally but very focused on specific general partners and one of the requirements of general partners for us is that they provide co-investment opportunities. That portfolio is kind of 50/50 between funds and directs (which includes co-investments) and that's a specific target. The GPs and that strategy was a new approach really when Simon Marc joined seven years ago. These things take time to generate the results.
Well, it's safe to say Simon Marc and his team are executing very nicely on this 'reset strategy' and that's another reason why I bring this latest deal to your attention.
Strategic partnerships with the right funds is essential in private equity because it allows Canada's large pensions to secure co-investment opportunities, enhance knowledge transfer and lower fee drag in private equity all while maintaining a healthy allocation to the asset class (in PSP's case, 15% of total net assets).
Last week I discussed how OTPP's Karen Frank is navigating the current market environment and you can see with this deal what Simon Marc and his team are looking for in their co-investment opportunities.
In particular, they're teaming up with a top PE fund to acquire a major player in the natural healthcare space which is run by a top management team.
This is a less cyclical and more defensive play and it touches upon important secular themes that will persist and become more entrenched in a post-pandemic world (health and well-being).
That's why BC Partners jumped on this opportunity to acquire Havea from 3i, another leading PE fund which acquired the company back in 2017 and helped it expand its activities in Italy and Belgium and grow through five strategic acquisitions.
And just to give you some more details, on pages 51-52 of PSP's Fiscal 2022 Annual Report, you will see more of a breakdown and details on its PE activities:
As you can see, the disposition of CeramTec, a leading manufacturer of high-performance ceramics which was acquired in fiscal year 2018 in partnership with BC Partners and other co-investors helped PSP's Private Equity performance last year.
But you will also note in fiscal 2022, PSP's Private Equity signed new fund commitments of
$2.8 billion through 22 new funds with existing external managers mostly in the US and Europe. Moreover, Healthcare, Technology and Financials are the top sectors, making up over 50% of PSP's PE portfolio.
Alright, let me wrap it up with what David Morin, Managing Director and Head of Europe, Private Equity at PSP Investments, states in the press release
“Over the last years, Nicolas Brodetsky, CEO of Havea, and his talented team have built great brands and have positioned Havea to benefit from industry tailwinds. We are excited to team up with BC Partners, who have been one of PSP Investments’ core partners for many years. Together, we will provide the long-term strategic capital to support Havea in achieving its full potential through its next phase of development as a European leader in natural healthcare.”
I think this is another great investment with a world-class partner and it underscores how PSP's Private Equity team continues to execute on its strategy through solid fund relationships leading to great co-investment opportunities.
Remember, co-investments require deep expertise to analyze these deals in detail and deliver great turnaround time to respond to GPs quickly and efficiently.
That's all part of the well-known Canada model.
Below, Nikos Stathopoulos, BC Partners chairman of Europe, discusses navigating portfolio companies through an inflationary rising-rate environment. He speaks with Dani Burger and Matt Miller on "Bloomberg Surveillance: Early Edition." This interview is also available here.
Take the time to watch it and listen carefully to his comments as he understands well what is going on in private markets and the challenging times they are preparing for. But he states clearly "we continue to deploy with the same discipline" and are "working harder" to make money for their investors in high inflation environment.
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