Target Information

LBO France, a leading multi-specialist investment platform and pioneer in private equity, has announced the acquisition of a majority stake in E.R.E (Entreprise Redonnaise d’Électricité), a significant player in the energy sector in France. E.R.E specializes in the design and manufacturing of high-voltage transformer substations (HTA/BT). This transaction marks a pivotal growth stage for E.R.E in a particularly promising market. Capelia, the principal shareholder since 2022, retains a significant minority stake alongside the management team led by Ludovic Bianchi.

As a key contributor to the energy transition in France, E.R.E is based in Brittany and is one of the few market players proficient in manufacturing ENEDIS-certified HTA/BT substations. The company boasts a design office and two industrial sites in Ille-et-Vilaine and Northern France, engaging in the design, manufacture, installation, and maintenance of substations. Their turnkey solutions leverage dual expertise in the fields of electricity and civil engineering, catering primarily to private market needs.

Industry Overview in France

The energy sector in France is currently experiencing dynamic growth, driven by strong trends such as renewable energy development and the electrification of transport and industrial uses. The French government has implemented various initiatives to promote clean energy and reduce carbon emissions, creating a favorable environment for companies like E.R.E. In recent years, the demand for high-voltage substations has increased significantly as the country transitions toward greener energy sources.

Renewable energy sources that include wind, solar, and hydropower are being embraced as part of the national strategy to diversify energy production. This shift is not only influencing traditional power generation methods but is also creating new business opportunities within the energy infrastructure sector, particularly for companies specializing in high-voltage technologies.

Additionally, the focus on electrifying transport systems and enhancing industrial electrical infrastructures underlines the importance of robust electrical systems, thus amplifying the role of E.R.E as a critical player. By 2024, the company generated approximately €30 million in revenue, reflecting its active contribution to the evolving energy landscape.

Rationale Behind the Deal

Through this acquisition, LBO France aims to support E.R.E's ambitions for external growth, particularly in diversifying its offerings and establishing itself as a multi-disciplinary reference player within the HTA/BT sector. A dedicated €15 million line for external growth has been established with a banking pool led by Arkéa. This investment will enable E.R.E to broaden its operational capabilities and market presence.

Furthermore, E.R.E will benefit from not only the financial support of LBO France but also the operational guidance offered by both LBO France and Capelia. These partnerships are designed to foster E.R.E's strategic objectives and enhance its market competitiveness.

Investor Information

LBO France is a pioneer in private equity in France and has evolved into a reference multi-specialist and multi-country investment platform. With impactful strides in Private Equity, Real Estate, Venture Capital, and public markets, the firm has expanded its operations across Europe, including Italy and Africa. LBO France, fully owned by its management, actively supports climate initiatives and was among the first signatories of the France Invest parity charter, reflecting its commitment to sustainable investments and corporate responsibility.

Jean-Marie Leroy, Partner in charge of Small Caps at LBO France, expressed enthusiasm about supporting E.R.E and Ludovic Bianchi in this new growth phase, highlighting their intention to work closely with management to realize the company's ambitions.

View of Dealert

The acquisition of E.R.E by LBO France represents a strategic and potentially lucrative investment opportunity. Given the increasingly critical role of high-voltage infrastructure in France's energy transition, the investment aligns well with ongoing market trends and the growing demand for sustainable energy solutions.

Moreover, E.R.E's proven track record and solid financial performance suggest that the company is well-positioned to capitalize on emerging opportunities in the energy sector. As the need for advanced electrical systems intensifies, E.R.E’s unique competency in HTA/BT substations positions it advantageously among its peers.

As companies and governments prioritize sustainability, the likelihood that E.R.E will experience continued growth is promising. Additionally, the strategic involvement of Capelia alongside LBO France can provide vital insights and additional resources, enhancing the prospect of successful outcomes as E.R.E scales its operations.

In summary, the combination of a robust market environment, E.R.E's strategic initiatives, and the financial backing of experienced investment partners represents a compelling investment decision, with the potential for significant returns in the energy sector.

View Original Article