TO SUCCEED IN times of plenty is one thing, but to prosper when all about you are fearful, is another. Such has been the success of Acces Industrie since Equistone’s acquisition of the company back in the summer of 2020.
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Over the past four years, this rental equipment specialist has proved a very positive investment – on many levels – and I have had the privilege of working with an inspiring and well-rounded executive management team, led by Eric Lacombe and Pascal Meynard.
To begin with, at least, the investment process was auspicious for the Equistone deal team, consisting of Guillaume Jacqueau, Grégoire Châtillon, Grégoire Schlumberger and myself. A former Equistone-backed CEO was already on the supervisory board of the target company. We had stayed in touch with Serge Ansaldo since, and this continuity provided comfort.
In many respects, Acces Industrie was a company that ticked the classic private equity boxes: it was a well-managed business, catering to healthy and diversified end-markets and a customer base operating across construction, industrial, retail and logistics, with a dominant position in France (a relatively immature market for aerial equipment), and an opportunity for international expansion.
Indeed, following the acquisition, our investment in Acces Industrie continued to be relatively plain sailing. During our investment period, the company doubled its EBITDA and outperformed both its budget and our investment case every single year.
A private equity investor really could not ask for more, were it not for one problem: between signing and the completion of our acquisition, the Covid lockdowns in France came into effect. We managed to close the deal on reasonable terms for all parties, but the prolonged economic disruption that ensued could have still proved very challenging. It is a testament to the company’s culture and the leadership team that the business continued to perform well, in the face of such challenge.
Whereas most of the company’s competitors were unable to continue business-as-usual, the motivation and ethos of Acces’s workforce meant that the company continued to perform right through the Covid period, ensuring it met both its moral and contractual obligations to all its stakeholders.
I must give specific credit to the company’s employees here, who were demonstrably committed to maintaining an excellent level of service, a fact we corroborated from consultation with the customer base. The company truly lived up to the phrase of never wasting a good crisis: without doubt, the relationship between Acces and its customers was strengthened as a result of its behaviour during this period.
Observing this, and in consultation with the management team, we built on the company’s obvious cultural strength and encouraged the enlargement of the employee shareholding in the business. Of the company’s 650 employees, about one hundred now own equity.
For a business that deals in heavy machinery, the importance of culture might seem marginal. Au contraire. The actual machines are barely different from their competitors, but the service customers receive is entirely different. For instance, the company commits to responding to any request – anywhere in France – within two hours.
Growth drivers
Even in deals where things work very well, Equistone deal teams can still add significant value. With Acces, much of our discussion with management was around how to divide resource and opportunity between organic and acquisitive growth.
The business implemented a wide range of operational improvements and these, combined with a network expansion across France, resulted in strong organic growth. An improved ‘utilisation rate’ – the key industry metric – was achieved, thanks to strong cooperation between different depots that saw more than half a depot’s revenues come from cross-group referrals – a major competitive advantage. The adoption of telematics improved the company’s fleet management; while at the head office, the appointment of a new CFO and other newly-created roles, also contributed to an impressive performance.
Even in deals where things work very well, Equistone deal teams can still add significant value. With Acces, much of our discussion with management was around how to divide resource and opportunity between organic and acquisitive growth.
We also spent a great deal of time filtering and analysing a large pool of potential add-on acquisitions with the management team – two of which materialised into investments, one in France and a second in Spain, which will be used as a platform for further expansion across Iberia.
It has been a period of significant volatility in the wider world, and in light of this, the company’s results have been all the more impressive: it has performed one year ahead of the original business plan.
Clearly, a major factor in this success is its ambitious, growth-oriented management team. For instance, the company’s leadership advocated a higher investment rate in new fleet and machinery than our investment case had provided. We always prefer to back management when we can, and in this case, we did so, despite a challenging macroeconomic backdrop – and it was the right call!
New horizons
Such was the company’s performance that we were able to refinance the business after two years, returning the majority of invested capital, while maintaining reasonable leverage.
As we entered 2024, with the company on an excellent footing, and the management team poised for a new phase of growth, it seemed like a good time to fully crystalise our investment. In addition, we felt that, with so few quality assets on the market, the company would attract attention.
A sales process garnered pleasing interest, resulting in a successful sale to French family investment group Delmas Investissements et Participations. Completed in July, the sale has delivered a strong return for Equistone investors and all the many shareholders in the business.
On a personal note, I would like to extend my gratitude to the hard work, skill and dedication of the many people who helped to realise the potential of this exciting European growth business and provided our investors with a strong return from a 2020 vintage investment – which also happened to be my first for Equistone. ☐
A full version of this article appeared in PLATFORM 11, Summer 2024