Target Information

The Cerea Mezzanine II Fund has successfully divested its shares in Moret Industries Group as of November 18, 2016. This divestiture follows the early repayment of mezzanine loans that took place on July 31, 2014, as part of a comprehensive refinancing of the group's debt.

As part of this process, Cerea Partners negotiated the sale of shares held by the Cerea Mezzanine II Fund with the group's president, whose family holds the majority of the company's capital. This transaction was concluded three to four years ahead of the originally scheduled timeline set out in the shareholders' agreement.

Industry Overview in France

The Moret Industries Group operates as a prominent player in the industrial pump manufacturing and distribution sector under the Ensival Moret brand. This brand emerged from the merger of two well-known companies, reinforcing its market presence. The group also offers industrial equipment designed for sugar refineries, distilleries, and applications related to drying and environmental sustainability through the Maguin and Vettertec brands.

France’s industrial sector has been significantly evolving, with a marked increase in demand for high-performance industrial pumps and engineering services aimed at the agri-food industries. Since 2010, the group's revenue has surged by approximately 79%, rising from €196 million to €350 million. The majority of this revenue is generated across Europe, Africa, and Asia.

The group currently employs 1,750 people, demonstrating a 39% increase in workforce since 2010. This growth reflects the overall recovery and expansion of the industrial sector in France, driven by technological advancements and increased investment in industrial infrastructure.

In the current landscape, there is a strong push for sustainable practices and energy optimization within the industrial sector, aligning with global trends towards environmental stewardship and efficiency. Moret Industries Group is well-positioned to capitalize on these trends through its dedicated energy optimization services offered under the MK Energie and Basis EP brands.

Rationale Behind the Deal

The decision to divest was influenced by the substantial growth of Moret Industries Group and its successful turnaround post-refinancing. The early exit allowed Cerea Mezzanine II Fund to realize significant returns on its initial investment while capitalizing on the group’s enhanced market position.

This strategic move also reflects the strong demand for high-performance industrial equipment and the promising growth potential inherent in the agri-food sector in both domestic and international markets.

Information About the Investor

Cerea Partners is a well-respected investment management firm specializing in mezzanine financing. The firm focuses on mid-market companies in various sectors, applying its expertise to support growth initiatives for portfolio companies.

Since its inception, Cerea Partners has made a mark in the investment landscape by offering tailored financing solutions that align with the strategic objectives of the companies it supports. This specific deal reaffirms Cerea Partners' commitment to maximizing shareholder value through timely and strategic divestments.

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Cerea Partners’ decision to divest from Moret Industries Group appears to be a prudent investment strategy, given the impressive growth trajectory of the company over recent years. The early exit not only secured substantial returns for the fund but also aligned with the evolving landscape of the industrial sector in France.

Moreover, the increasing demand for energy-efficient solutions and high-performance pumps positions Moret as a future-ready enterprise. By exiting the investment while the company continues to flourish, Cerea Partners has capitalized on favorable market conditions.

However, it is worth noting that the success of such deals hinges on the performance and adaptability of the underlying companies. While Moret has shown resilience and potential for continued growth, future investors should remain vigilant about market shifts and competitive pressures in the industrial sector.

Overall, this deal reflects an insightful decision by Cerea Partners, demonstrating their adeptness in navigating the complexities of investment timing and market opportunities. Their strategic divestment likely leaves room for future investments that continue to enhance their portfolio.

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