Successful Exit

In collaboration with partners Ardian, Mérieux Equity Partners, and Eximium, the Mid-large buyout team at Eurazeo has divested its stake in Humens to Leto Partners, a French private equity firm focused on decarbonization challenges. This divestment reflects the successful transformation of the company both financially and socially, highlighting Eurazeo's strategic involvement since the carve-out from the Seqens group in December 2021.

Now, under the guidance of Leto Partners, Humens is set to pursue new horizons, prioritizing innovation and energy transition in its strategic objectives.

Target Company Overview

Initially part of the Seqens group following its acquisition by Eurazeo in 2016, Humens has emerged as an industry leader. The company provides sodium bicarbonate to the pharmaceutical, cosmetic, and agri-food industries, as well as sodium carbonate for the production of flat and hollow glass.

Driven by Eurazeo's influence, Humens has placed energy transition at the forefront of its growth strategy, with an ambitious target to achieve carbon neutrality by 2035. To this end, Humens has set a goal to phase out coal use in its industrial processes by 2023 and to reduce its carbon intensity by 60% by 2025 compared to 2017 (measured in tCO2/ton of product). The company has established an operational biomass plant in 2023 and plans to start a solid recovered fuel energy recovery plant by 2025. In total, an estimated 1,359,000 tons of greenhouse gas emissions are projected to be avoided between 2017 and 2025.

Moreover, in a commitment to balanced CSR progress, Eurazeo has assisted Humens in enhancing its social and governance practices, notably by implementing a responsible purchasing approach with suppliers between 2018 and 2020, and promoting gender diversity and the inclusion of independent members in its Supervisory Board.

Industry Overview in France

The decarbonization sector in France is gaining momentum as businesses are increasingly pressured to reduce their carbon footprints. With national and European regulations encouraging sustainable practices, companies are motivated to innovate and comply with environmental standards. The French government has set ambitious targets for reducing greenhouse gas emissions by 2030, which has further fueled growth in this industry.

Within this context, the market for materials and chemicals that support the transition to a low-carbon economy is evolving rapidly. Companies that embrace sustainable production are finding new opportunities, driven by technological advancements and increased consumer demand for eco-friendly products. Investors are particularly interested in businesses that are committed to sustainability, providing robust returns while contributing positively to climate change mitigation.

As firms like Humens lead the way in sustainable practices, their efforts not only address immediate market demands but also align with global initiatives aimed at reducing environmental impact. The emphasis on Corporate Social Responsibility (CSR) is becoming a crucial differentiator for companies looking to enhance their reputation and secure a competitive edge.

Overall, the French decarbonization industry is well-positioned for growth, as stakeholder expectations rise and innovative solutions emerge, paving the way for significant transformations in business operations and practices.

Rationale Behind the Deal

The decision to divest Humens was driven by the desire of Eurazeo and its partners to capitalize on the financial and operational successes achieved during their ownership. The strategic focus on energy transition and sustainable practices has not only enhanced Humens' market position but also attracted a value-driven partner like Leto Partners, who is aligned with these objectives.

This transaction is seen as an opportunity for Humens to scale its CSR initiatives further and explore new collaborations, allowing for strategic expansion in line with its commitment towards environmental and economic objectives.

Investor Overview

Leto Partners, the acquiring firm, specializes in private equity investments targeting companies that are committed to sustainability and decarbonization. With a portfolio that embodies the principles of responsibility and innovation, Leto Partners seeks to partner with industry leaders like Humens to accelerate the transition to a low-carbon economy.

The expertise and resources of Leto Partners are expected to significantly enhance Humens' growth trajectory, enabling the company to meet its ambitious sustainability targets while driving operational improvements and market expansion.

View of Dealert

From an analytical perspective, this transaction represents a sound investment opportunity for Leto Partners. Given the growing emphasis on sustainability and decarbonization in France and across Europe, Humens is well-positioned to leverage its strong market position and commitment to carbon neutrality.

The strategic alignment between Leto Partners and Humens enhances the likelihood of achieving ambitious environmental goals while delivering robust financial returns. Moreover, the ongoing support for innovative practices and responsible governance will contribute positively to the company’s reputation and operational efficiencies.

Furthermore, the investment allows Leto Partners to expand its influence in a critical sector that is likely to receive increased attention from regulators and investors alike. By actively engaging with Humens, Leto Partners can help direct initiatives that not only comply with regulatory frameworks but also foster a culture of sustainability within the industry.

Overall, the deal illustrates the broader market trend of aligning financial objectives with socially responsible practices, making this investment a potentially lucrative venture, poised for growth in the evolving decarbonization landscape.

View Original Article