Target Information

Capital Croissance has announced the sale of its majority stake in Equativ (formerly Smart Ad Server) to funds managed by Bridgepoint Development Capital as part of a management buyout (MBO). This transaction marks the first exit from Capital Croissance's Cairn Capital II fund, which was raised in 2019, and constitutes the firm's 13th exit overall, achieving an average gross multiple of 3.5x across these transactions.

Founded in 2006, Equativ is an internationally operating French group that provides technological solutions for online advertising management, including ad servers, Supply Side Platforms, and Demand Side Platforms, catering to premium advertisers and publishers. Since its MBO at the beginning of 2021, Equativ has experienced substantial growth, increasing its net revenue from €36 million to €92 million ($100 million) and multiplying its profits by over five times.

Industry Overview in France

The digital advertising industry in France has been in a state of continuous evolution, driven by advancements in technology and changes in consumer behavior. Advertisers increasingly seek integrated solutions that provide transparency and efficiency in their advertising spend, which has led to a surge in demand for sophisticated platforms like Equativ that offer comprehensive tech solutions.

In recent years, the French market has witnessed significant investments in digital advertising technologies, especially with the rise of video and connected TV (CTV) advertising. This shift reflects broader trends across Europe, where brands aim to enhance their digital footprints in a competitive landscape.

The regulatory environment around digital advertising in France has also tightened, pushing companies to adapt quickly to comply with new standards aimed at consumer protection and data privacy. Equativ's robust technology and strong market presence uniquely position it to navigate these changes while capitalizing on new growth opportunities.

As consumer preference shifts towards more personalized and interactive advertising experiences, platforms that can deliver targeted content effectively are likely to thrive. Equativ is well-positioned to leverage these trends due to its innovative solutions and its expansion into the U.S. market, which has been a key driver of its recent successes.

Rationale Behind the Deal

The rationale for this deal revolves around addressing the rapidly changing dynamics of the digital advertising space. With Bridgepoint Development Capital stepping in as the new majority shareholder, the goal is to implement an ambitious buy-and-build strategy that will enhance Equativ's capabilities and market share.

Capital Croissance's reinvestment as a minority stakeholder underscores its confidence in Equativ's management team and the company’s potential for further growth. The partnership aims to capitalize on the evolving advertising landscape by expanding Equativ's offerings and exploring new market opportunities.

Investor Information

Bridgepoint Development Capital specializes in investing in middle-market companies across Europe, focusing on sectors that demonstrate high growth potential and scalability. With a proven track record in orchestrating successful buyouts, Bridgepoint aims to leverage its experience and resources to support Equativ in its next phase of growth.

Bridgepoint's investment approach emphasizes collaboration with management teams, providing not only financial backing but also strategic guidance aimed at achieving long-term value creation. This investment in Equativ reflects their commitment to partnering with high-potential firms in the digital sector.

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This deal represents a significant opportunity for Equativ to enhance its market presence and accelerate growth under new ownership. The strategic alignment between Bridgepoint and Equativ suggests a promising direction for the company's future. The management team's capabilities, combined with Bridgepoint's resources, present a strong foundation for pursuing ambitious growth plans.

From an investment perspective, the move seems prudent given Equativ's impressive growth trajectory and expanding portfolio. The digital advertising industry's ongoing transformation highlights the necessity for companies like Equativ to innovate continuously, making this partnership potentially lucrative for all stakeholders involved.

Furthermore, the successful execution of the buy-and-build strategy could lead to enhanced operational efficiencies and increased market share, which would likely add significant value over time. Overall, this transaction may well be viewed as a wise investment decision for both Capital Croissance and Bridgepoint, enabling them to capitalize on the vibrant and growing digital advertising sector.

In conclusion, the strong fundamentals of Equativ, along with the decisive backing from Bridgepoint, indicate a solid potential for future success within the increasingly competitive and technology-driven advertising landscape.

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