ACG Capital and Edmond de Rothschild Investment Partners announce the signing of an agreement to sell the Acto Mezzanine business

Private Equity - 7/1/2016

ACG Capital, an independent leader in European private equity, will sell its Acto Mezzanine business to Edmond de Rothschild Investment Partners, which is boosting its growth in the business lines of unlisted securities in Europe. ACG Capital also intends to continue its development through organic growth and external growth.

This activity was part of the scope acquired from Groupama Private Equity in 2013, when the insurer sold its funds of funds branch, now renamed ACG Capital. Under the leadership of its new shareholder, ActoMezzanine has enjoyed great success, particularly the closing of a second fund in 2015 for €210 million, bringing its assets under management to €400 million. However, the past three financial years underscored the lack of synergies with the company’s other activities, both in the targets and in access to capital resources. The ACG Group therefore decided to accept the proposal from Edmond de Rothschild Investment Partners, especially to allow it to focus on the management of European funds of funds on behalf of international LPs.

Through this transaction, Edmond de Rothschild Investment Partners will round out its investment offering for European growth SMEs and SMIs. With its focus on the issues of development and transfer of entrepreneurs, Edmond de Rothschild Investment Partners wished to have a mezzanine financing tool and rely on a high-quality team in order to be competitive on transactions, particularly sponsorless transactions that the Cabestan Capital and Winch Capital development capital teams do not cover. Upon completion of this transaction, Edmond de Rothschild Investment Partners will have 54 employees and €1.5 billion in assets under management, not including the fundraising currently in progress or planned for Cabestan Capital 2, Bio Discovery 5, and, in early 2017, Acto Mezzanine 3.

For the ActoMezz investment team, this transaction will allow it to consider the further development of its business in a management company managing exclusively direct funds and sharing the same DNA of supporting entrepreneurs. The team consisting of six investors (Stéphane Bergez, Laurent Fichter, Arnaud Faure, Xavier Buisson, Jean-Baptiste Bessières, Christine Martinovic), soon reinforced with two new professionals, will continue to manage the Acto Mezzanine 1 and Acto Mezzanine 2 funds and is preparing for fundraising for the successor fund Acto Mezzanine 3 in the first half of 2017. It will also be able to take advantage of significant support from common and new institutional clients as well as private clients of the Edmond de Rothschild Group.

During the final months of preparation for this transaction, the ActoMezz team and Edmond de Rothschild Investment Partners became convinced that this merger would be done on the basis of shared values, a reliable common organisation, and areas of collaboration creating value for the investor clients and the funded companies.

The parties signed a sale agreement providing for the effective transfer of the Mezzanine activity to Edmond de Rothschild Investment Partners as from 1 August 2016. This sale agreement remains subject to various conditions precedent and particularly the approval of the amendments to the Acto Mezzanine 1 and 2 regulations by the investors of the affected funds.

Wladimir Mollof, Chairman of ACG Capital: “With €1.8 billion under management, ACG Capital is now boldly showing its growth ambitions, particularly in its historical business line – management of funds of funds – in the primary and secondary markets. Continuing its momentum of development, our company intends to be selective in taking advantage of the European market’s external growth opportunities, particularly on the secondary segment”.

Antoine Le Bourgeois and Gilles Nobécourt, co-managers of Edmond de Rothschild Investment Partners:We are delighted to welcome the ActoMezz team within our management company, which will benefit from a new essential expertise on the non-listed European SME/SMI investment market. Our institutional investors have also supported the integration of ActoMezzanine alongside our existing franchises so that Edmond de Rothschild Investment Partners can be a dynamic player in the current consolidation of the European private equity market. The prospect of welcoming a solid team respected on the mezzanine debt market, the proximity of investor cultures, as well as the long-standing ties between the various teams are key factors for the successfully completion of this acquisition”.

Stéphane Bergez, associate on the Acto Mezzanine team:The ActoMezz team is pleased to join Edmond de Rothschild Investment Partners to pursue its development there. We thank Edmond de Rothschild Investment Partners for their confidence in us as well as the Investors of the Acto Mezzanine 1 and 2 funds for their support in this new stage. We are convinced that sharing the same human values and the same objectives of performance and excellence for the benefit of entrepreneurs and our clients will bring us joint success in the future”.

Parties to the transaction

Buyer: Edmond de Rothschild Investment Partners
Edmond de Rothschild Investment Partners: Sylvain Charignon, Pierre-Michel Passy, David Robin
Lawyers: Oliver Deren, Charlotte Dupont, Paul Hastings

Seller: ACG Capital
ACG Capital: Wladimir Mollof, Jean-François Court, Mathieu Bourdié
Lawyers: Xavier Norlain, DLA Piper

ActoMezz: Stéphane Bergez
Lawyers: Serge Levine, CVML

About Edmond de Rothschild Investment Partners
Edmond de Rothschild Investment Partners is a leader in minority investments of development capital and venture capital in life sciences in privately owned companies. Established in France, the company has deployed investment teams in Paris and Milan (through the exclusive partnership Mast Capital). The management company, consisting of 45 people including 29 investment professionals, manages more than 1.3 billion euros.
Edmond de Rothschild Investment Partners is a partnership limited by shares (SCA) 51% owned by the Edmond de Rothschild Group and 49% owned by the general partner Montalivet Investment Managers, a holding company grouping together the management company’s partners and employees.
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About ACG Capital
ACG Capital is a management company dedicated to private equity and accredited AIFM by the AMF. The company offers primary and secondary funds of funds to institutional investors. ACG Capital has €1.8 billion under management. ACG Capital is a member of ACG Group, a leading independent private equity firm in Europe. With €2.8 billion under management, ACG Group offers both institutional and individual investors a choice of funds covering all asset categories.

About ActoMezz
Founded in 2006, the ActoMezz team manages €400 million through the Acto Mezzanine 1 (2007) and Acto Mezzanine 2 (2013) funds. ActoMezz is the special partner of leaders of French SMEs who wish to take control of their company.  ActoMezz supports their development as an arranger of mezzanine (mainly sponsorless) and minority capital investments. With more the 30 transactions completed, ActoMezz is one of France’s most experienced teams in mezzanine investment. ActoMezz invests 5 to 45 million euros per transaction.

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