Target Information

The SUCSEZ Group is a leading technology-driven distribution platform operating within the Dutch insurance market, primarily focused on small and medium-sized enterprises (SMEs) and excelling in income insurance. Originally formed through the acquisition of SUCSEZ by Capital A and its management in mid-2016, the platform has implemented an ambitious strategy for both organic and acquisition-led growth. Since its establishment, the SUCSEZ Group has significantly expanded by integrating SUCSEZ with the Heilbron Group in mid-2017 and now provides a comprehensive range of services under various brands, including Heilbron (broker), Mandaat (mandate), De Verzuimeconoom (reintegration and occupational health services), and UPIVA (services).

Headquartered in Doetinchem, the SUCSEZ Group operates from 12 locations across the Netherlands and employs 500 staff. It generates over €60 million in revenue through both organic growth and 11 acquisitions, the most recent being Hemelraad and Keijzer in De Lier and Branche Benefits in Assen.

Industry Overview

The Dutch insurance market, characterized by a strong emphasis on innovative technology solutions, is adapting to ongoing regulatory changes and customer demands. As digital transformation accelerates, there is an increasing need for distributors who can efficiently manage processes and provide value-added services to SMEs. This promotes not only enhanced customer experience but also operational efficiency, setting the stage for ambitious growth strategies among market participants.

Furthermore, in recent years, consolidation in the sector has been a significant theme, as companies seek to achieve economies of scale and enhance their service offerings. Recent market trends indicate that businesses are increasingly focusing on integrated solutions and collaboration among providers, which aligns well with the SUCSEZ Group's service-oriented strategy.

In the Netherlands, regulatory frameworks and initiatives encouraging digital innovation are also shaping the industry, driving firms to adopt advanced technologies. The necessity for improved customer engagement and streamlined operations has opened avenues for companies like SUCSEZ to expand their market presence and drive profitability.

As the market continues to consolidate and evolve, firms positioned to leverage technology and adapt to changing client needs will likely experience rapid growth, further establishing their competitive edge in the marketplace.

Rationale Behind the Deal

The acquisition of a majority stake in the SUCSEZ Group by Five Arrows Principal Investments (FAPI) is seen as a strategic move that aligns with the group's growth objectives. The collaboration is expected to enhance SUCSEZ's operational capabilities while enabling it to capitalize on FAPI's extensive expertise in technology-driven value creation and European market networks.

CEO Marco Gregoor expressed optimism about this partnership, indicating that FAPI's track record in developing scalable business models will be instrumental as SUCSEZ embarks on its next growth phase, including plans to continue consolidating the market by integrating additional firms.

Investor Information

Five Arrows Principal Investments is the corporate private equity division of Rothschild & Co's Merchant Banking business, managing over €11 billion globally. FAPI specializes in investing in companies across Europe that possess strong market positions and management teams committed to enhancing the businesses they lead. Their primary sector focus includes healthcare & education, data & software, and technology-driven business services.

Rothschild & Co's Merchant Banking division operates based on a foundation built over 200 years, emphasizing independence and long-lasting client relationships. With a broad investment portfolio and a global reach, this division is well-positioned to support the SUCSEZ Group's ambitions moving forward.

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The investment in the SUCSEZ Group by Five Arrows Principal Investments appears to be a timely and strategic decision, aligning with current market dynamics that favor consolidation and technology-driven growth. Given the management team's continued presence and expertise, this partnership has the potential to drive significant value creation and facilitate further expansion into the Dutch insurance market.

The ongoing trend of consolidation indicates that SUCSEZ could quickly become a primary player in the sector, especially as it aims to integrate additional companies under its umbrella. The focus on customer needs and a shared technology platform will likely enhance service delivery and operational efficiency.

Moreover, FAPI's deep understanding of the European market and experience in fostering growth through operational improvements can greatly benefit SUCSEZ. This collaborative approach not only aids in realizing the group's long-term growth objectives but also positions it favorably to navigate future industry challenges.

In conclusion, the investment is likely to be a good one provided that the management can execute its strategic vision effectively, capitalizing on current market opportunities and sustaining momentum in an evolving insurance landscape.

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