An Update on the French Private Equity Industry

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by Alexis Auchere and Elena Gousia

With record amounts of capital raised, around 1200 companies backing (first semester of 2017) high levels of diversified sources of financing, 2017 has been an intense year for private equity in France. What is worth noting is the increased attractiveness of French targets among international investors. This is supported by the four times larger value of inbound private equity (PE) and venture capital (VC) investments in 2017 (graph 3). Also, it is noted that the value of French domestic PE and VC investments doubled in value in 2017.

According to Martin Naquet-Radiguet – Partner in charge of Private Equity for PWC France – LBO deals are currently at historically high levels both in terms of value and volume. He recalled that France has always been a market of secondary LBO. He mentioned that Healthcare, Financial Services and Software are the most active sectors but outlined that others profit from the current favourable conjuncture – e.g. the building materials industry with for example the acquisition of Chryso by Cinven from LBO France for c.€500m.

Graph 1: Top Inbound French Private Equity Deals By Volume And Value. Source: France M&A review 2017, Bureau Van Dijk

Valuations continue to rise at an average EBITDA multiple over 10x. Nevertheless, according to Martin-Radiguet, as long as these valuations take into account the real capacity of cash-generation and are differentiated according to the quality of the assets, we are not in the situation of bubble.


In 2017, Advent International – partnering with Bpifrance – merged its portfolio company Oberthur Technologies with Safran Identity & Security (Morpho). This deal combined a specialist in security chips embedded in mobile devices with a leader in biometric identity technology. The newly-created company – called IDEMIA – has combined revenues of €2.9 billion and bridges the government and commercial sectors.


A concentration trend has begun in France, in 2017, with several deals among Private Equity partners, ranging from Eurazeo’s purchase of Idinvest to the Apax France’s acquisition of small cap specialist EPF Partners. M&A seems to be seen by managers as a way to compensate rising marketing and regulatory costs as investors commit more and more money to fewer managers.


Following a European trend of rebrands by several European private equity bodies – including notably the pan-European organisation EVCA changing its name to Invest Europe – French private equity industry body AFIC (Association Française des Investisseurs pour la Croissance/French Private Equity and Venture Capital Association) has been renamed as “France Invest“.

According to Olivier Millet, the organisation’s chair and Chairman of the Executive Board of Eurazeo PME, “This change of identity marks our shared ambition to give private equity more prominence in France”


The current attractivity of the French PE industry is expected to be reinforced in 2018 for a series of favourable aspects. Firstly, President Macron recently unveiled employment and tax reforms to increase France’s appeal for deal makers. Also, the current government is planning to increase venture capital investments to promote the growth of start-ups. This is planned to be implemented through Bpifrance and by utilising capital raised by privatisations. Bpifrance was founded in 2013 to channel VC funds to start-ups and its role, according to Paul-François Fournier, the Head of Innovation in Bpifrance, ‘helps to explain why the VC industry is growing faster in France than elsewhere in Europe’. Lastly, another factor expected to contribute to the growth of French PE is Brexit. Some private equity groups, including KKR, have mentioned prospects of increased PE investments in France and capped investing in the UK due to the uncertainty associated with Brexit. France has been ranked 6th by PE managers when answering the question “Which countries or regions will become more attractive for private equity investments over the next five years? (Private Equity Trend Report 2018, PWC).

Graph 2: Venture capital fundraising (€bn). Source: Dealroom, FT


Graph 3. Inbound French private equity deals by volume and value. Source: France M&A review 2017, Bureau Van Dijk


Authors: Elena Gousia, Alexis Auchere

Editor Responsible: Carmelo Spallino

Sources: France M&A Review 2017 BUREAU VAN DIJK, PWC Reports, Forbes, The Economist, Financial Times, Lexology, Real Deals