Bridgepoint teams with Eurazeo on €1bn real estate deal

UK-based Bridgepoint and Paris-listed Eurazeo have joined forces for the first time to acquire European real estate management company Foncia.

Private equity firms Bridgepoint and Eurazeo will each invest €240 million in equity in the buyout of Foncia from French financial services group BPCE. The deal's €1.02 billion enterprise value represents a multiple of 12.5 times the company’s 2010 earnings before interest, tax, depreciation and amortisation of €83 million.

BPCE is re-investing €200 million in the business for a 17 percent stake, under “conditions that protect Eurazeo and Bridgepoint’s returns”, a statement said. The balance of the transaction will be funded with €395 million of debt financing. BPCE also is issuing a €100 million vendor loan to support the deal, it said in a separate statement.

Bridgepoint is understood to have originated the deal, which it then introduced to Eurazeo as the overall deal size was above its normal sweet-spot, a source with knowledge of the deal said. It is the first time the two firms have worked together on a deal.

The buyout pair has been granted exclusivity, with the deal set to complete subject to two conditions: the process of informing and consulting the staff representative bodies concerned and the agreement of the competition authorities.

Foncia has a network of more than 600 branches in France, Switzerland, Germany and Belgium and employs almost 7,000 people. It offers a range of services for the residential real estate market including lease management, joint property management, sales advice, financing research, insurance and technical diagnoses. The two private equity firms said they would make €90 million available to Foncia to assist with its development.

Patrick Sayer, chairman of Eurazeo’s executive board, said in a statement: “Foncia has a leading position in the residential real estate services sector in France, which presents tremendous development opportunities. Our ambition is to make Foncia the best-in-class in the residential real estate services sector. With Foncia’s staff, we will continue to make investments and modernise its business in order to strengthen its position as the leading company in France and Europe, both in terms of size and the quality of its services.”

Benoît Bassi, a partner responsible for Bridgepoint's French activities, added: “We want to work closely with the existing management, putting the emphasis on staff training, the modernization of IT tools and the development of original commercial offers, to make Foncia the leading European residential real estate services company.”