Hedge funds and Private Equity - PES

Picard
1. Company description
Picard was created in 1973 by Armand Decelle who acquired a small home delivery business
based in Fontainbleau. In 1994 the company was sold by Carrefour and in 2001 bought out by
management and members of the founding family backed by the private equity investors being
Candover, Chevrillon, Montagu and Astorg. In 2004 a second LBO took place, it was led by
BC Partners and management still headed by a member of the Decelle family.
The company now has a market share of more than 16% and is the major frozen food retailer in
France. Its sales network consists of 640 stores and over 20 home delivery centers in France
and 42 shops in Italy. Picard also offers a home delivery service in London. The pace of organic
growth in France is of 40 stores per year. Picard offers a range of more than 1,000 basic and
ready-made products. Five warehouses, two of which are directly managed by Picard, ensure the
stores’ supply.
2. Economic and social effects
2.1 LBO description (offshore base, activity focus, etc.)
In the first LBO in 2001 Candover, together with Chevrillon & Associes, Astorg Partners and
Montagu PE, has led the €920m buyout transaction. This consortium of four funds alongside
Picard’s management committed a total equity ticket of €320 million. 79% of this amount was
provided by private equity 21% was subscribed by management. Total debt was of €600m.
In 2004 the four funds exited their investment as part of the normal active management of their
portfolio. The second LBO of 2004 was led by BC Partners who alongside the Decelle family
and management, acquired all of the capital of Picard for an enterprise value of €1,308 million.
Own financing totaled €465 and the remaining part is senior debt and mezzanine financing.
2.2 Debt structure, alteration of company capital management
fees requested by LBO
Calyon and RBS provided the debt of the second LBO.
2.3 Effects on job creation, investments in training
and education of labour force, investment in innovation
Since the first buyout Picard has developed its network from 441 shops in 2002 to 640 in 2006
which represents a 45% growth and has a clear impact on the employment level. In 2002 firm’s
headcount was of 2200 which has increased by 59% and totaled 3500 in 2006. With 40 new
shops every year, Picard is a constantly developing enterprise that still retains a human dimension.
Picard invest more than 2.5% of its total payroll in training to enable the employees to
evelop skills either in the sales network (shops and home services) or in relation to backup
roles (human resources, expansion, communication, purchasing, logistics, IT).
Annex – 21 Case studies
223