Three prominent French businessmen, including the telecoms billionaire Xavier Niel who own Eir, have joined forces to create a blank-cheque company that caters to the demand for organic food and more sustainable consumer goods.
<p class="no_name">They plan to raise €250 million-€300 million via a “special purpose acquisition company” that will be listed on the Euronext exchange in Paris.</p>
<p class="no_name">Mr Niel has teamed up with <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Centerview+Partners" rel="nofollow">Centerview Partners</a> banker <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Matthieu+Pigasse" rel="nofollow">Matthieu Pigasse</a>, although the sectoral expertise and strategic vision comes from their partner, <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Moez-Alexandre+Zouari" rel="nofollow">Moez-Alexandre Zouari</a>. The 49-year-old French entrepreneur has built a small empire in food retail as the franchise partner of supermarket chain <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Casino" rel="nofollow">Casino</a>, and also jointly owns frozen-food group <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Picard" rel="nofollow">Picard</a>. </p>
<p class="no_name">Their new shell company, or Spac, will be called <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=2MX+Organic" rel="nofollow">2MX Organic</a> in a nod to its founders’ initials and their target market.</p>
<p class="no_name">Like other Spacs, it plans to raise cash from investors on the basis that managers will buy a company or return the money after a certain date if they are unable to complete a purchase.</p>
<p class="no_name">“We want to build a European champion in organic food,” said Mr Zouari in an interview. “People want to consume differently nowadays, not only for their health and wellbeing but for that of the planet.”</p>
<p class="no_name">The men have mapped out a strategy to consolidate Europe’s fast-growing but fragmented organic food market. They want to create a “vertically integrated” group, so would consider acquisitions both in retail and in the production of organic foods or sustainable household products.</p>
<p class="no_name"><a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Deutsche+Bank" rel="nofollow">Deutsche Bank</a> and Société Générale will carry out the bookbuilding from Monday, with a target of selling 25 million shares for €10 each. The shares are expected to start trading by mid-December.</p>
<p class="no_name">The trio want to capitalise on the momentum among consumers and investors increasingly looking for companies built around environmental, social and governance (ESG) themes.</p>
<p class="no_name">“Our objective is to do the first acquisition as quickly as possible in 2021,” said Mr Pigasse. The first deal should be worth “around €2 billion” so as to serve as a platform for subsequent deals.</p>
<p class="no_name">“We have four or five targets in mind already, and want to be quite ambitious for the first acquisition,” said Mr Niel.</p>
<p class="no_name">Long a niche corner of finance, Spacs are one of the hottest trends on the US equity market because they offer a faster route to market without the cumbersome process of a traditional initial public offering. Hedge fund stars such as <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Bill+Ackman" rel="nofollow">Bill Ackman</a> and former banker <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Michael+Klein" rel="nofollow">Michael Klein</a> have adopted them, and banks reap lucrative fees from the transactions.</p>
<p class="no_name">Spacs have raised a record $64 billion in the US this year, according to Bloomberg, against $786 million in Europe.</p>
<p class="no_name">Mr Pigasse and Mr Niel created France’s first Spac in 2015 with the aim of consolidating the television production industry. Their company, <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Mediawan" rel="nofollow">Mediawan</a>, has since bought roughly 30 businesses to become a leader in scripted drama in Europe, highlighting how Spacs can be used to raise money quickly for dealmaking.</p>
<p class="no_name">The pair hope to repeat Mediawan’s experience in a new sector – consumer goods with a sustainable twist – by capitalising on Mr Zouari’s expertise. “He is the well-kept secret of French retail,” said Mr Niel.</p>
<p class="no_name">Mr Niel sought to distance the trio’s long-term approach from the get-rich-quick tactics used by some Spac sponsors in the US. At Mediawan, he and Mr Pigasse have not taken money out and have continued to back its expansion.</p>
<p class="no_name">“We are here to build up a real company that will operate and expand over time,” said Mr Niel of the new Spac.</p>
<p class="no_name">The three will buy at least €6 million worth of shares in a separate share sale reserved for them, and will collectively own roughly 30 per cent of the company after the listing.</p>
<p class="no_name">Mr Zouari said he would separately seek to buy up to €30 million worth of shares in the main rights offer, depending on availability. – Copyright The Financial Times Limited 2020</p>