Private equity in France: market and regulatory overview

A Q&A guide to private equity law in France.

The Q&A gives a high level overview of the key practical issues including the level of activity and recent trends in the market; investment incentives for institutional and private investors; the mechanics involved in establishing a private equity fund; equity and debt finance issues in a private equity transaction; issues surrounding buyouts and the relationship between the portfolio company's managers and the private equity funds; management incentives; and exit routes from investments. Details on national private equity and venture capital associations are also included.

To compare answers across multiple jurisdictions visit the Private Equity Country Q&A Tool.

This Q&A is part of the global guide to private equity. For a full list of jurisdictional Q&As visit www.practicallaw.com/privateequity-mjg.

Contents

Market overview

1. How do private equity funds typically obtain their funding?

In 2013, the total amount raised by private equity funds increased by 20% compared to 2012 but remained inferior to the level seen in 2008 and also to the needs in equity of small and mid-cap companies (estimated at EUR11 billion per year).

It should be noted that one fund represented 39% of the total amount collected in 2013 and eight funds represented the remaining 60%.

There is continued uncertainty over the tax regimes applicable to the regulated retail fund structures, that is, fonds d'investissement de proximité (FIPs) and fonds communs de placement dans l'innovation (FCPIs) (see Questions 2 and 5).

In 2013, a total of EUR8.152 billion was contributed, with the major contributors being:

  • Insurance companies: EUR2.101 million (25% of the total amount) up from EUR572 million in 2012 and close to the 2008 level of EUR2.260 billion.

  • Government agencies: EUR1.514 million (19% of the total amount) up from EUR1.107 million in 2012 and up from EUR784 million in 2008. This is as a consequence of a large contribution by the French Government (EUR255 million in 2011, EUR862 million in 2012, EUR963 million in 2013).

  • Individuals and family offices: EUR1.295 million, up from EUR1.107 million in 2012 and down from EUR3.001 billion in 2008.

  • Funds of funds: EUR1.129 million (14% of the total amount) up from EUR865 million in 2012.

  • Pension funds: EUR1.078 million (13% of the total amount) up from EUR393 million in 2012 and down from EUR1.907 billion in 2008.

  • Banks: EUR585 million (7% of the total amount) down from EUR611 million in 2012 and down from EUR2.939 billion in 2008.

  • Industrials: EUR290 million (4% of the total amount) stable (2012: EUR289 million).

France contributed EUR4.513 billion, Europe (excluding France) EUR1.926 billion and the rest of the world EUR1.713 million.

The source for these figures is the Association Française des Investisseurs en Capital (AFIC) (see www.afic-asso.fr/Etudes).

 
2. What are the current major trends in the private equity market?

The total amount raised in 2013 was up to EUR8.152 billion, compared to EUR5.008 billion for 2012, due to:

  • An increase in foreign investments.

  • High contribution of insurance companies, including an exceptionally high contribution to one fund for EUR3.18 billion.

  • 30% of all investments were over EUR1 billion.

 
3. What has been the level of private equity activity in recent years?

Fundraising

In 2013, 75 management companies raised money for a total of 146 investment vehicles (compared to 76 management companies and 183 vehicles in 2012). Out of the 146 investment vehicles, 88 were new compared to 108 new investment vehicles out of a total of 183 in 2012.

Investment

Forecasted allocations per business in 2013 were:

  • Innovation capital: up from EUR1,030 million in 2012 to EUR1.375 million.

  • Development capital: up from EUR1,891 billion in 2012 to EUR2.843 billion.

  • Transmission capital: up from EUR2,086 billion in 2012 to EUR3.932 billion.

  • Turn-around capital: nil.

Transactions

In 2013, EUR6.482 billion (an increase of 7% from 2012) was invested in 1,560 companies (1,548 in 2012). The number of companies remains stable and the amount invested has slightly increased but still remains low compared to 2007 figures of nearly twice that amount at 12.554 billion.

Reinvestments represent 56% of the EUR6.482 billion showing the capacity of private equity to support its portfolio companies.

Investments in France represented 82% of the amounts invested by French funds and 86% of the companies were French.

Exits

In 2012, exits reached a total of nearly EUR5.7 billion from the sale of 1,019 companies. Most of 2013 exits were for less than EUR5 milllion with exits over EUR50 million multiplied by four and totalling nearly 50% of the divested amounts (EUR 3.057 million).

In 2013, secondary transactions had the lead with 280 private and public M&A transactions for EUR2.634 billion followed by management with 205 purchased companies for EUR634 million and industrials with 200 purchased companies for EUR1.006 billion. IPOs surged from two to six and totalled EUR410 million.

 

Reform

4. Are there any proposals for regulatory or other reforms affecting private equity in your jurisdiction?

The private equity industry is affected by any new regulations applicable to portfolio management companies, especially to the extent that such regulations impose new organisational and compliance standards and/or legal requirements. In particular, the Directive 2011/61/EU on alternative investment fund managers (AIFM Directive), which has been transposed into French law in 2013, has affected the French private equity industry in various ways:

Certain investment vehicles, including unregulated funds dedicated to private equity, now fall within the definition of 'alternative investment fund' and their managers are required to register as fund managers under the AIFM Directive (for example, certain SCRs) unless they benefit from an applicable exemption or do not operate as an alternative investment fund.

There are additional reporting requirements to regulators, investors and employees in relation to any controlling acquisition.

No distributions of assets or dividends and no reduction of capital or share redemptions are permitted for the first 24 months after an investment by a private equity fund. This rule, intended to prevent asset stripping, may have an operational impact on the fund's ability to structure the investment.

However the AIFM Directive is not applicable to small fund managers (that is, fund managers with less than EUR500 million of assets under management) and to small or medium-sized enterprises (SMEs) (within the meaning of EU legislation).

The legal texts that implemented the AIFM Directive in French law are not yet final. Therefore, on some matters (for example, marketing),there is no clear guidance on how the new rules will work in practice.

 

Tax incentive schemes

5. What tax incentive or other schemes exist to encourage investment in unlisted companies? At whom are the schemes directed? What conditions must be met?

French tax law provides for several tax incentive schemes to encourage investments in unlisted companies with industrial or commercial activities.

Most of these schemes are directed at investors (both individual investors and corporate), but some incentive schemes specifically benefit innovative companies. On top of these specific incentive schemes, investments in unlisted companies are likely to give rise to tax savings in accordance with the general tax rules.

Individual income tax exemptions

Individual investors benefit from an exemption from income tax on investment income and capital gains derived through FCPRs, FCPIs, FIPs and SCRs (sociétés de capital risque), if such investors:

  • Hold their units (or shares) for a five-year period.

  • Reinvest all distributions from the fund (or the SCR) over the same five-year period.

  • Hold no more than 25% of the financial rights in the portfolio companies of the fund (or the SCR).

Individuals are also entitled to a tax exemption on capital gains derived from the disposal of shares in recently created and innovative enterprises (jeune entreprise innovante) (JEI), (see below).

In both cases, individuals residing in France remain subject to social contributions equals as of today to 15.5%.

Individual income tax reduction

Investments (capital contributions) in European venture capital companies may give the right to an income tax reduction for the investor if the company:

  • Is in start-up, development or expansion phase.

  • Is not listed on a regulated market.

  • Has its registered office in a member state of the EU, Norway, Iceland or Liechtenstein.

  • Is subject to corporate income tax.

  • Has two employees or more.

  • Carries on industrial, commercial activities.

  • Is an SME.

The investor must also elect to hold its shareholding for a five-year period from the date of capital contribution.

For payments made since 1 January 2013, the income tax reduction is equal to 18% of the investment, subject to caps of EUR 9,000 for a single person and EUR 18,000 for a couple.

This income tax reduction also applies to investments in FCPIs and FIPs. In such cases, the reduction is capped at EUR2,160 (FCPI) and EUR4,560 (FIP) for a single person and EUR4,320 (FCPI) and EUR9,120 (FIP) for a couple.

Wealth tax incentives

Investments qualifying for the income tax exemption (see above, Individual income tax exemptions), made from 13 October 2010, can alternatively (and therefore not cumulatively) also give right to a wealth tax reduction equal to 50% of the investment, but capped at EUR45,000. This reduction is also available for investments made through a holding company (Holding ISF).

The same reduction applies to investments in FCPRs, FCPIs and FIPs, with a cap at EUR18,000.

In both cases, the shares or units issued in consideration for these investments are exempt from wealth tax.

Corporate income tax exemptions

A special regime applies to corporate investors investing in FCPRs and SCRs if they elect to hold their units or shares for a five-year period.

If so, distributions paid out of capital gains realised by the fund or the company and occurring at least two years as from the subscription are likely to be taxed at a reduced rate:

  • 0% for that part of distributions relating to long-term capital gains (that is, investments of at least 5% in the share capital of underlying companies held for at least two years).

  • 15% for the remainder.

In addition, after the five-year holding period has been satisfied, capital gains realised on the sale of units in FCPRs or shares in SCRs may benefit from the same reduced rates.

Standard rules allowing tax savings for corporate investors

French tax law provides for several favourable schemes that are commonly used in private equity investments to mitigate the overall tax burden of the transaction:

  • Participation exemption. Dividends paid by a portfolio company to a French corporate vehicle are 95% exempt from corporate income tax if the parent company holds 5% or more of its subsidiary for at least two years. Dividends paid by a French company to its corporate parent that is resident in an EU member state are exempt from withholding tax under the same conditions.

  • Interest deduction. Interest paid by French corporate vehicles in consideration for borrowings relating to acquisition of portfolio companies are deductible within the limit of 75%, subject to specific limitations (see Question 23).

  • Tax consolidation (intégration fiscale). If the acquisition vehicle owns at least 95% of the portfolio, both companies can elect for the setting up of a tax consolidated group in order to be taxed as a single entity. Such an election allows, among others, reconciliation of the profits of the portfolio company with the losses of the acquisition company.

 

Fund structuring

6. What legal structure(s) are most commonly used as a vehicle for private equity funds in your jurisdiction?

For retail investors, the structures generally used are FCPIs and FIPs (retail funds). In the case of sophisticated and/or institutional investors, a fonds professionnel de capital investissement (FPCI) formerly named an FCPR allégé or a fonds professionnel specialisé (FPS) formerly, FCPR contractuel or OPCVM contractuel (non-retail funds) are the most common vehicles. These vehicles were already regulated under French law before the implementation of the AIFM Directive.

Other types of investment vehicles can be used:

  • A special wealth tax (impôt sur la fortune) holding vehicle (holding ISF), for private individuals seeking a tax benefit relating to the French wealth tax (see Question 5)

  • An SCR, for private and professional investors forming a club deal of investors in an evergreen fund.

Since the implementation of the AIFM Directive, these other types of investment vehicles have become regulated and, unless they benefit from an exemption, are required either to register as a self-managed fund or to be managed by a regulated portfolio management company.

 
7. Are these structures taxed, tax exempt or tax transparent (flow through structures) for domestic and foreign investors?

FCPRs, FCPIs, FIPs, FPCI and FPS themselves are not subject to tax on their income and gains. Instead, French tax is levied on their investors:

  • Tax is assessed according to:

    • the source and the nature of the income flowing through regulated funds; and

    • the tax status of their investors (see Question 5).

    Investors are therefore taxed as if they had directly received such income from the underlying investment, meaning non-French tax residents can benefit from withholding tax exemptions or reductions depending on their country of residence and the source of income.

  • Tax is due on distribution to investors and therefore not when the regulated fund receives income.

SCRs are exempt from corporate income tax. Their shareholders are subject to tax on dividend distributions according to their tax status and the nature and source of underlying income. French residents may benefit from a favourable tax treatment for dividends paid out of capital gains (see Question 5). Non-French residents can benefit from withholding tax exemptions or reductions depending on their country of residence.

Corporate vehicles (such as holdings ISF) are subject to corporate income tax at the standard rate tax but are likely to benefit from the exemption on dividends and capital gains under the participation exemption regime, see Questions 5 and 30. Their shareholders are subject to tax on dividend distributions according to their status and their country of residence.

 
8. What (if any) structures commonly used for private equity funds in other jurisdictions are regarded in your jurisdiction as not being tax transparent (in so far as they invest in companies in your jurisdiction)? What parallel domestic structures are typically used in these circumstances?

French tax authorities generally recognise the tax transparency of foreign funds but consider accordingly that they are not treaty-protected as they are not subject to tax. French-source passive income paid to those funds is therefore likely to be subject to French withholding tax under French domestic rules.

However, French-source passive income flowing through foreign funds can benefit from the withholding exemption or reduction under double tax treaties entered into by France if, among other conditions, this income is subject to tax in the hands of the funds' investors. As far as private equity funds are concerned, this regulation is generally inapplicable for practical reasons as it is difficult to demonstrate that each investor is actually subject to tax in its state of residence.

Certain recent tax treaties specifically provide that investment funds are deemed to be tax resident thereby benefitting from treaty protection (such as the US-France and UK-France tax treaties).

The French tax authorities also consider that certain EU private equity funds (such as Luxembourg SICARs) are not eligible for the participation exemption regime with respect to both inbound and outbound dividends because they are de facto exempt from corporate income tax.

FCPRs and French or EU corporate vehicles (such as the Luxembourg Soparfi and Dutch Co-operative) can be used as parallel structures.

 

Investment objectives

9. What are the most common investment objectives of private equity funds?

Most private equity funds invest in unlisted companies, and the rate of return and average life of the fund depend on the underlying investment objective (such as development or transmission capital, venture, turn-around or distressed situations, and so on).

In certain cases, private funds may invest in different assets (such as the financing of film production or arbitration proceedings).

 

Fund regulation and licensing

10. Do a private equity fund's promoter, principals and manager require licences?

Private equity funds must be managed by a management company licensed by the financial services regulator, the Autorité des marchés financiers (AMF), as a private equity portfolio management company.

The management company must appoint a custodian authorised by the Autorité de contrôle prudentiel to provide safe keeping and custody of assets for investment funds.

Certain private equity vehicles that were not regulated before the implementation of the AIFM Directive but are now required to have their managers licensed (see Question 4) could be exempted from the appointment of a custodian if, in particular, they have total commitments of less than EUR500 million and their investors are not retail investors.

 
11. Are private equity funds regulated as investment companies or otherwise and, if so, what are the consequences? Are there any exemptions?

Regulation

A retail fund must be authorised by the AMF before its formation and any marketing of interests to prospective investors. The formation of non-retail funds must only be notified to the AMF within one month thereafter.

The marketing of interests in a private equity fund must comply with French regulations relating to public offerings, solicitation, and the marketing regime applicable after the implementation of the AIFM Directive, subject to applicable private placement exemptions.

Public offering

Retail and non-retail funds (see Question 6) are subject to prior approval of, or filing requirements with, the AMF. Interests in such funds may be offered to the public without any additional approval or registration if such funds are exclusively marketed in France. Any marketing outside of France must comply with the requirements relating to the marketing passport enacted by the AIFM Directive.

For French private equity funds that are not included in the definition of retail and non retail funds above, prior approval of the AMF of any offering documentation must be obtained before interests can be offered to the public.

Private placement exemptions for public offering

Prior approval by the AMF of the offering documentation of private equity funds that have become regulated after the implementation of the AIFM Directive is not required if the interests in such fund are offered to qualified investors (see definition below) or to a restricted circle of fewer than 150 investors.

Marketing and solicitation

Interests in FPCI, FPS, FIP, FCPI and SCRs can only be marketed by French investment service providers or credit institutions, or by entities or individuals registered in a public registrar of authorised salespersons (démarcheurs). In practice, the marketing of non-retail regulated funds is restricted to certain categories of investors.

Marketing of private equity funds, other than those listed above, is not permitted unless such marketing is directed to qualified investors or to legal entities which satisfy any of the following criteria:

  • Total balance sheet.

  • Total sales or total assets in excess of EUR5 million.

  • A total workforce in excess of 50 individuals.

Qualified investors include institutional investors (credit institutions, insurance companies, and so on), large corporate entities, governmental or international bodies or organisations (or their equivalent in foreign laws) and any high net worth individual who:

  • Has elected to be treated as a professional client and with respect to whom an investment service provider authorised to operate in France has agreed to accept such election.

  • Satisfies at least two of the following criteria:

    • holding a portfolio of financial instruments having a value in excess of EUR500,000;

    • carrying out an average of at least ten major trades (that is, in excess of a gross amount of EUR600 per transaction) in financial instruments per quarter over the previous four quarters;

    • holding a professional position in the financial sector for at least one year requiring knowledge of investments in financial instruments.

 
12. Are there any restrictions on investors in private equity funds?

Investment in non-retail funds is reserved to sophisticated investors such as qualified investors or any entity or individual subscribing more than EUR100,000. There are no specific restrictions for the other types of private equity funds (see Question 6 ).

 
13. Are there any statutory or other limits on maximum or minimum investment periods, amounts or transfers of investments in private equity funds?

No specific restrictions exist except for SCRs, retail funds and FPCIs.

SCRs must invest 50% of their assets in eligible investments issued by commercial companies organised in France and/or the EU (limited exemptions are available for investments made in holding companies and/or investment funds organised in the European Economic Area (EEA) where appropriate tax treaties are in place).

Retail funds and FPCIs (see Question 6) must invest at least 50% of their assets in equity, equity related securities or securities giving access to capital issued by non-listed companies (eligible investments).

However:

  • FCPIs must, in addition, invest up to 70% of their assets in eligible investments issued by innovative companies organised in France, the EU or (where appropriate tax treaties exist) the EEA.

  • FIPs must, in addition, invest up to 70% of their assets in eligible investments issued by SMEs organised in a specific geographic areas of France, the EU or (where appropriate tax treaties exist) the EEA, and up to 20% of this quota must be invested in newly formed companies.

  • FCPIs and FIPs must invest up to a certain percentage of their assets within a period of twelve months following their last closing date and are allowed to invest on a limited basis in listed companies and/or holding companies.

The various quotas must be complied with no later than the end of the second accounting period of the fund.

Retail funds are also required to organise the disposal of the fund's assets before the tenth anniversary of their formation.

 

Investor protection

14. How is the relationship between the investor and the fund governed? What protections do investors in the fund typically seek?

The terms and conditions of an investor's investment are governed by the fund's governing documents, which are:

  • The bye-laws.

  • Subscription agreements.

  • Side letters.

  • The articles of association.

  • Shareholders' agreements and, if applicable;

  • The terms and conditions of the securities issued by the fund.

The terms and conditions applicable to investors in regulated funds differ between retail funds and other types of private equity funds. The governing documents of a retail fund must comply with detailed French law requirements in order for the fund to be approved by the AMF. Therefore, investors in a retail fund generally do not have flexibility to negotiate the terms or to request protections in addition to those already provided by law.

The governing documents of private equity funds that are not retail funds are more frequently negotiated by investors because French laws and regulations allow flexibility for a wide variety of terms. Investors negotiate provisions that are commonly looked for by investors in global private equity funds, such as:

  • Key person and change of control provisions.

  • For fault and no fault suspension of investment period/removal of management company.

  • Limitations relating to raising a successor fund.

  • Management and other fees.

  • Reporting obligations.

  • An advisory committee role and seat.

 

Interests in portfolio companies

15. What forms of equity and debt interest are commonly taken by a private equity fund in a portfolio company? What are the relative advantages and disadvantages of each? Are there any restrictions on the issue or transfer of shares by law?

Common forms

Bonds and shares are the two main tools usually used by investors, depending on the objectives and the financing scheme.

Advantages and disadvantages

There are four main differences between bonds and shares:

  • Financial characteristics: Bonds are a debt instrument, which means that the company has repayment obligations to the investor while shares are equity and represent ownership in a company. Bonds are fixed-income securities as they provide a fixed income in the form of interest until their maturity. Yield from shares depends on the target company's revenues.

  • Dilutive effect: Unlike shares, the issuance of bonds has no effect on the target company's shareholding.

  • Repayment in bankruptcy. Bonds are repaid before shares in the event of the target company's liquidation.

  • Tax consequences: Interests are deductible from the taxable income of the borrower subject to limitations (see Question 23) while dividends are not.

These differences can be mitigated through the issuance of more complex instruments such as bonds with warrants, bonds convertible into shares or preferred shares (with financial characteristics).

Restrictions

The issuance of bonds in French share companies is subject to three conditions. The issuer must:

  • Have its share capital entirely paid up.

  • Be and have been incorporated for at least two years.

  • Have prepared and approved two annual financial statements.

If the issuer does not comply with this last condition, its shareholders may decide to appoint an independent auditor to review the issuer's financial situation and draft a report.

Transfers of bonds can be freely completed, unless the bond issuance agreement between the issuer and the bond holder provides otherwise.

The issuance of shares is subject to two main conditions:

  • The share capital must be paid up in full.

  • The nominal value of the shares to be issued cannot be less than the par value of the existing shares of the same category.

There are no restrictions on the transfer of shares, unless provided otherwise in the issuer's bye-laws or another document (for example, shareholders' agreement). Prior approval provisions, pre-emptive rights, lock-up provisions or similar clauses are usually inserted in the investment documentation.

 

Buyouts

16. Is it common for buyouts of private companies to take place by auction? If so, which legislation and rules apply?

An open bid process is often used to complete private equity transactions (especially for mid- and large-cap transactions). No specific French rules apply. The process is similar to that in common-law jurisdictions and requires the execution of a confidentiality agreement. It is increasingly common to see the payment of an entry fee by some investors to obtain an exclusive bid process and to close the open bid process to their sole benefit within a certain period of time.

 
17. Are buyouts of listed companies (public-to-private transactions) common? If so, which legislation and rules apply?

The number of public to private transactions is relatively stable on French regulated and non-regulated markets but remains low with around 20 delisting procedures per year due to corporate, financing and tax constraints, for example:

  • The offeror must obtain and hold 95% of the target company's voting rights to be allowed to delist. Minority shareholders can be squeezed out once this threshold has been reached. Even if some options are available to the offeror to reach the threshold (such as a contribution undertaking with the current shareholders or an off-market block trade) it is always practically difficult to predict whether the delisting process will be successful.

  • The threshold not being reached will prevent the offeror from benefiting from the tax consolidation (see Question 5).

  • The binding nature of the tender offer requires that financing already be certain when the offer is filed with the AMF.

  • Public to private transactions are subject to control by the AMF.

Principal documentation

18. What are the principal documents produced in a buyout?

The documentation produced in a buyout is similar to the documentation seen in the US and UK (although probably shorter), including, notably a:

  • Confidentiality undertaking.

  • Information memorandum.

  • Letter of intent or memorandum of understanding (with or without a term sheet).

  • Acquisition agreement (share purchase agreement or investment agreement). There are no specific requirements as to the form of the agreement. The transaction's main issues are generally addressed in this document, such as consideration, representations and warranties, seller's liability, non-compete or non-solicitation matters, regulatory approval and so on.

  • Corporate documentation in connection with the investment (when necessary), including issuance of preferred shares, warrants or bonds, drafting of new bye-laws, setting up of new corporate bodies and appointment of their members and so on.

  • Shareholders' agreement.

  • Financing documentation (including senior credit agreement, mezzanine facility, subordination agreement and related security documentation.

  • Management package, including, as the case may be, issuance of specific equity instruments for the management (warrants and/or preferred shares), execution of put and call options, employment agreements and so on.

Buyer protection

19. What forms of contractual buyer protection do private equity funds commonly request from sellers and/or management? Are these contractual protections different for buyouts of listed companies (public-to-private transactions)?

Generally, the main forms of protection that investors seek are representations and warranties in the acquisition documentation. The due diligence process and more generally the climate of the negotiations between the investors, the sellers and the managers of the target company during the auction are therefore crucial. Discussions usually take place between the retained bidder and the sellers and the managers of the target company concerning the scope of the representations and warranties, their limitation and the parties involved. Generally, investors require representations from managers and warranties from all the sellers.

In secondary leveraged buyouts, the scope of the undertakings made by a management who is going to reinvest together with the investors may be subject to long and tough discussions. Investors may also ask for additional protections such as non-compete or non-solicitation provisions and insert incentives and bad leaver mechanisms in the management package documentation.

The sale of a listed company is mainly characterised by the fact that such type of companies are subject to a significant and continuous information obligation. Any event which could have a material impact on the stock price must be disclosed to the market. The collection and analysis of information therefore take a different form for the bidder. The scope of the contractual protections also depends on the profile of the target company's shareholding.

If a very large part of its shares is held by the public, the public will not grant any contractual protections to the purchaser. The only commitment of the sellers will be to sell their shares.

However, if the target company's shareholding is composed of one or several controlling interests, the purchaser could be interested in acquiring such controlling interests before launching a tender offer. In such a case, specific representations and warranties can be negotiated by the purchaser. Should the purchase of the controlling interest trigger a mandatory tender offer, the representations and warranties will then be detailed in the bidder's prospectus.

 
20. What non-contractual duties do the portfolio company managers owe and to whom?

Directors and corporate officers are bound by the requirements of the French Commercial Code concerning the management of French companies. Management's obligations include the following:

  • Managers are liable for breach of any legal or regulatory provisions applicable to the type of French entity they manage as well as for violation of its bye-laws.

  • Managers must act in compliance with the company's corporate interest. The definition and scope of this are still discussed by French courts. However, management actions are generally considered as non-compliant with the company's corporate interest when they are not profitable, useful or favourable to the company.

  • Managers are bound by a legal duty of confidentiality regarding any information pertaining to the business of the company and by a non-compete obligation during the term of their office.

  • Depending on the type of French entity, managers have an obligation to regularly convene and hold meetings of the board of directors, shareholders or any other corporate bodies that may exist, under the company's bye-laws. In addition, managers must report certain information to the other corporate officers (if any) and the shareholders.

 
21. What terms of employment are typically imposed on management by the private equity investor in an MBO?

Other than the incentive instruments that are offered to the management, investors also aim to prevent managers from engaging in activities which may damage the company's business. The following provisions are typically inserted in a manager's employment agreement, shareholders' agreement or any standalone document entered into between the concerned manager, the investor and the target company:

  • Non-compete obligations. The purpose of this is to prevent the manager from carrying on any form of business that competes with the business of the target group. The insertion of non-compete provisions in a shareholders' agreement raises the issue of the compensation and certain decisions by the French courts indicate that compensation must be paid just as if the non-compete provision was included in an employment contract.

  • Non solicitation obligations. Investors may wish to prevent the manager from soliciting or enticing away any key customers or employees of the target group.

  • Confidentiality provisions. These may be negotiated to maximize the confidentiality obligations that bind the manager.

  • Good leaver and bad leaver provisions. To prevent the shareholding manager from continuing to benefit from the development of the company and the efforts of the management team, investors generally require that a manager transfers his shares (through a put or call option) to certain or all shareholders for value when he leaves the company. Discussions may take place to determine what price should be paid for those shares depending on the circumstances of the manager's departure.

 
22. What measures are commonly used to give a private equity fund a level of management control over the activities of the portfolio company? Are such protections more likely to be given in the shareholders' agreement or company governance documents?

French corporate law offers various alternatives to permit investors to remain updated on the company's business and to monitor certain of its decisions. In particular:

  • Limiting management's powers. Investors and managers determine together the matters or the type of matters that require prior approval from a corporate body. This will include certain management decisions (such as execution of a commercial agreement up to a certain threshold), financing decisions, appointments and so on. Discussions will also cover the voting system (whether a veto right is granted to the investor or whether a qualified majority or unanimous vote is required, and so on). Investors must be careful not to act as if they were managers of the target company (de facto management) as French courts could hold them liable in case of breach by the target company of applicable law or in the event of a bankruptcy procedure.

  • Financial information reporting. Investors usually ask to be provided with certain financial information within an agreed period (such as a monthly management report, quarterly account report, continuing review of the company's books).

These restrictions or adjustments to the management powers and the voting system can be provided for in the bye-laws (this is the case when specific powers are granted to the investor through the issuance of preferred shares) or in a shareholders' agreement. The main difference between these two options is the enforceability against third-parties. Provisions of the shareholders agreement only bind the parties to such agreement while provisions of the bye-laws are enforceable against third parties.

 

Debt financing

23. What percentage of finance is typically provided by debt and what form does that debt financing usually take?

Buyout acquisitions have seen a downward trend in debt ratios (even if they remain higher than those observed before 2008). In 2010 and during the first half of 2011, European buyout transactions were completed on the basis of an average debt of 4.42 and 4.6 times the target companies' earnings before interest, taxes, depreciation and amortisation (EBITDA) respectively. Finding high yield financing has become more difficult due to the economic situation.

On the mezzanine side, uni-rate loans were used in 2011 for transactions in which the sponsor needed to rapidly finance the operation and negotiate with only one debt holder (rather than a banking pool). The maturity for this type of loan is between six and eight years with a global interest rate between 11% and 13%. However this structure is generally more expensive than a classic scheme combining senior debt and mezzanine debt.

In addition, tax rules limiting the deductibility of interest must be taken into account:

  • Interest rate limitation on intra-group loans. Interest paid by a French vehicle to related lenders is deductible only if it does not exceed the annual average rate of return on loans granted by financial establishments. However, a higher interest rate can be allowed if the borrower company proves that it could be granted such an interest rate from non-related finance companies subject to the same financial conditions.

  • Thin capitalisation rules. These provide for a limitation on the deductibility of interest paid by a French company to related lenders (or to third party lenders if loans are secured or guaranteed by the borrower's related entities) if the interest exceeds each of the three following thresholds for a given fiscal year:

    • the interest multiplied by 1.5 times the company's equity (at either the opening or the closing date of the fiscal year, on the election of the company) (debt-to-equity threshold);

    • 25% of the adjusted operating income (that is, operating income before tax increased by related party interest, depreciation and certain lease payments) (interest coverage threshold);

    • the amount of interest received from related parties (received interest threshold).

    Interest in excess of the highest of these three thresholds is not deductible from the taxable income of the company (unless such amount is less than EUR150,000). The excess interest can be carried forward indefinitely, subject to a reduction of 5% a year starting in the second fiscal year following that of the payment of the excess interest.

  • Amendement Charasse. If the acquisition vehicle and the target company create a tax consolidated group under which they are both controlled, directly or indirectly, by the same shareholder, a certain portion of the consolidated interest deducted by the members of the tax consolidated group must be added back to the consolidated net profit for tax purposes. This limitation on the deductibility of interest is therefore likely to apply to owner buyouts.

  • Amendement Carrez. In order to combat schemes whereby international groups purchase participating interests through French enterprises or companies with the aim of assigning to these French entities a right of deduction of the corresponding financial expenses, the amending finance law for 2011 has set up a mechanism of staggered reintegration of these charges along the lines of the Amendement Charasse. French entities that are transferees of participating interests must now demonstrate that they actually make the decisions relating to these interests; otherwise, a fraction of their global financial expenses will be reintegrated to their taxable result.

  • Hybrid loans. Interests incurred on related parties loans are subject to the condition that the borrower provides proof that the tax actually borne by the lender on the corresponding interest income is equal to 25% or more of the corporate income tax determined under ordinary conditions.

Lender protection

24. What forms of protection do debt providers typically use to protect their investments?

Security

Multiple tranches of debt are commonly used to finance buyout operations. Therefore, various types of securities are available to debt providers, depending on the seniority of the facility granted (senior acquisition facility, capital expenditure facility, refinancing facility, revolving facility or mezzanine debt financing). However, the nature of the security package remains subject to statutory restrictions (see Question 25).

Senior financing is generally secured by granting a pledge over the target company's shares. It is also possible to obtain security over the holding company's receivables. Subject to the legal restrictions, other securities may be granted over certain assets of the target company (provided that it benefits from the financing) such as its real estate, going concerns (fonds de commerce), bank accounts or IP rights. Mezzanine facilities are made available through the issuance of bonds (and not as a loan) due to applicable laws concerning financing activities. When required, a mezzanine facility can also be secured on the target company's shares.

Contractual and structural mechanisms

Financing documentation generally contains covenants requiring that:

  • Certain commercial or financing decisions be taken only after informing the debt providers or receiving their prior approval.

  • The target company complies with certain financial ratios.

  • Some assignment mechanisms may be put in place to ensure that certain sums are used to reimburse the lender, such as:

    • the indemnity paid to the target company or holding company in the event of a breach by the sellers of their representations and warranties;

    • the sums paid out under the key man insurance policy taken out by the target company.

More traditionally, various lenders enter into a subordination agreement to determine their respective ranking and payment priority. Shareholders and managers are also party to the subordination agreement.

Financial assistance

25. Are there rules preventing a company from giving financial assistance for the purpose of assisting a purchase of shares in the company? If so, how does this affect the ability of a target company in a buyout to give security to lenders? Are there exemptions and, if so, which are most commonly used in the context of private equity transactions?

Rules

A company cannot advance funds, grant loans or grant security interests to enable a third party to subscribe or purchase its shares (Article L. 225-216 of the French Commercial Code). Third parties for this purpose include any shareholder of the company providing the loan or granting a security. The prohibited transactions must be performed before and in view of the subscription or the purchase of the relevant shares. Security interests include any mortgage, guarantee, first demand guarantee, pledge and so on. Breaches of these rules are subject to criminal sanctions.

Exemptions

Article L. 225-216 of the French Commercial Code only applies to a company limited by shares. No financial assistance rules apply to other forms of French companies but French corporate interest rules strongly limit the feasibility of upstream schemes.

In addition, Article L. 225-216 of the French Commercial Code does not clearly deal with schemes in which the securities are granted by the subsidiary of the parent company to finance the acquisition of the shares of the parent company. Care should therefore be taken in structuring such relationships to minimise potential sanctions. Such structuring must also be carefully examined under the corporate interest rules and these schemes may be regarded as abnormal management decisions of the portfolio company by the French tax authorities (see Question 30).

Insolvent liquidation

26. What is the order of priority on insolvent liquidation?

Creditors have the following ranking:

  • Employee wages (these prevail over any other claims.

  • Costs resulting from the legal proceedings and incurred as of the opening of the bankruptcy procedure.

  • New money priority payment (creditors who lend money after the opening of the bankruptcy procedure and within the context of a specific agreement).

  • Creditors with a retention right.

  • Creditors with high ranking securities.

  • Additional wages.

  • Tax and social security claims.

  • Creditors with low ranking securities.

  • Creditors without securities.

  • Shareholders holding preferred shares providing for a priority payment.

  • Shareholders holding common shares.

Equity appreciation

27. Can a debt holder achieve equity appreciation through conversion features such as rights, warrants or options?

Bonds are generally combined with equity instruments (see Question 14). Three types of bonds are generally used in a buyout transactions:

  • Bonds with equity warrants attached (obligations à bons de souscription d'actions) (OBSAs).

  • Bonds convertible into ordinary or preferred shares (obligations convertibles en actions ordinaires ou de preference) (OCAs).

  • Bonds redeemable in shares (obligations remboursables en actions) (ORAs).

A debt holder can also achieve equity appreciation though a share capital increase and it is possible (subject to conditions) to complete a share capital increase by netting off a debt that the company owes to a third party such as a debt holder.

 

Portfolio company management

28. What management incentives are most commonly used to encourage portfolio company management to produce healthy income returns and facilitate a successful exit from a private equity transaction?

The package negotiated between the investors and the managers typically uses:

  • Shares. This may include:

    • execution of put and call option on shares with bad and good leaver clauses;

    • issuance of preferred shares with specific rights;

    • issuance of free shares;

    • issuance of shares with equity warrants (actions à bons de souscription d'actions ordinaires ou de préférence).

  • Bonds. This may include the issuance of:

    • classic bonds;

    • OCAs;

    • OBSAs.

  • Warrants. This may include the issuance of:

    • ordinary warrants (bons de souscription d'actions), which may be combined with shares or bonds;

    • specific forms of warrants such as founder's warrants (bons de souscription de parts de créateur d'entreprise).

The structuring of management packages has come under close scrutiny in the wake of the financial crisis and many are currently subject to renegotiation.

 
29. Are any tax reliefs or incentives available to portfolio company managers investing in their company?

Other than tax reliefs (see Question 5), the most common incentives for managers include:

  • Options to purchase or subscribe shares (stock options). These may be granted to employees and managers of the issuing companies and to those of a related entity. Beneficiaries must not hold more than 10% of the share capital of the company at the time of the grant. In addition, the global amount of shares under the option must not represent more than one-third of the share capital of the company. For the favourable tax regime to apply, beneficiaries must not dispose of underlying shares before the fourth anniversary of the date of grant.

  • Restricted share units (free shares). These may be granted free of charge to the same beneficiaries and under the same limitations as those of share options except that the beneficiary must not hold more than 10% of the share capital either at the time of the grant or as a result of the grant. To benefit from the favourable tax regime, free shares must be issued or attributed after a minimum of two years, and then held by the beneficiary for another minimum of two years.

Tax

The tax regime will depend on whether or not stock options and restricted stock units have been granted before 28 September 2012 or after that date:

Stock options and RSU's granted before 28 September 2012. If they comply with the above mentioned requirements, gains arising from incentives are taxed as follows:

  • Share options:

    • upon granting: a social contribution is due by the employer at the rate of 30% of the fair market value of the underlying shares;

    • upon sale of underlying shares (at least four years after the grant): the acquisition gain (that is, the fair market value of shares on exercise minus exercise price) is subject to income tax at the rate of 30% for the part below EUR152,500 and 41% above (these rates are reduced to 18% and 30% if the employee elects to hold the shares for two additional years as from the end of the initial four-year period) social contributions at the global rate of 15.5%; an employee's contribution at the rate of 10%; and the capital gain (that is any gain made on top of the acquisition gain) is subject to income tax at the progressive income tax rates and social contributions (15.5%). Such capital gain could benefit from a discount, the rate of which depends on the holding period of the shares (for example 50% if the holding period is at least equal to two years).

  • Free shares:

    • upon granting: employer's contribution is due at the rate of 30% of the fair market value of the shares granted;

    • upon sale of shares: the acquisition gain (that is, the fair market value of the shares on acquisition, that is on the second anniversary of grant) is subject to income tax at 30%, social levies at 15.5% and employee's contribution at the rate of 10%; and the capital gain (that is any gain made on top of the acquisition gain) is subject to income tax at the progressive income tax rates and social contributions at 15.5%. Such capital gain could benefit from a discount, the rate of which depends on the holding period of the shares (for example 50% if the holding period is at least equal to two years).

Stock options and RSU's granted from 28 September 2012. They are taxed as follows:

  • Stock-options:

    • upon granting: a social contribution is due by the employer at the rate of 30% of the fair market value of the underlying shares;

    • upon sale of underlying shares: the acquisition gain is subject to income tax at the progressive income tax rates and social contributions (15.5%) and an employee's contribution at the rate of 10%; and the capital gain (that is any gain made on top of the acquisition gain) is subject to income tax at the progressive income tax rates and social contributions (15.5%). Such capital gain could benefit from a discount, the rate of which depends on the holding period of the shares (for example 50% if the holding period is at least equal to two years).

  • Free shares:

    • upon granting: employer's contribution is due at the rate of 30% of the fair market value of the shares granted;

    • upon sale of shares: the acquisition gain (that is, the fair market value of the shares on acquisition, that is on the second anniversary of grant) is subject to income tax at the progressive income tax rates and social contributions (15.5%) and employee's contribution at the rate of 10%; and the capital gain (that is any gain made on top of the acquisition gain) is subject to income tax at the progressive income tax rates and social contributions (15.5%). Such capital gain could benefit from a discount, the rate of which depends on the holding period of the shares (for example 50% if the holding period is at least equal to two years).

 
30. Are there any restrictions on dividends, interest payments and other payments by a portfolio company to its investors?

Upstream issues are particularly important in the context of buyout acquisitions. The payment of dividends is subject to the existence of revenues to be distributed and the decisions of the shareholders to distribute these amounts. For certain forms of companies, a portion of the revenues (5% for example in sociétés anonymes (SAs) and sociétés par actions simplifiées (SASs) must be allocated to the statutory reserve before any distribution takes place. Cash payments may also take the form of management fees and the holding company may receive money from the target company in consideration for performance of several services (financial and accounting assistance, management services, human and resources assistance). Such services must be real and effective and the consideration paid must be at arm's length. Upstream mechanisms are likely to be challenged by French courts if they do not comply with the corporate interest of the companies involved. In addition, in such cases, the French tax authorities may challenge the tax deductibility of the upstream payments in the hands of the portfolio company on the grounds that they would represent an abnormal management decision.

 
31. What anti-corruption/anti-bribery protections are typically included in investment documents? What local law penalties apply to fund executives who are directors if the portfolio company or its agents are found guilty under applicable anti-corruption or anti-bribery laws?

No specific protections are included in the investment documents. However, a fund’s manager may, if so requested by a prospective investor, make representations and give warranties as to the compliance of the fund and its manager with any relevant anti-corruption/anti-bribery laws. For investment agreements relating to an investment in a company by a fund, such representations, as well as similar covenants addressing the future, are frequently found. The penalties applicable under French anti-corruption laws are fines between EUR75,000 and EUR150,000 and imprisonment between 5 and 10 years.

 

Exit strategies

32. What forms of exit are typically used to realise a private equity fund's investment in a successful company? What are the relative advantages and disadvantages of each?

Several forms of exit can be considered:

  • The initial public offering (IPO) but this is only possible for successful and performing companies. In addition, an IPO is a lengthy (and sometimes hectic) process that therefore needs to be carefully considered and planned.

  • A secondary buyout operation may take the form of a secondary or tertiary LBO or a management buyout (MBO). In each case, the financing structure is crucial to ensure the exit conditions are satisfactory for the initial investors (and the terms and conditions of the reinvestment acceptable to the managers) or, for a MBO, that the investment amount is not too large for the managers.

  • Investors may decide to sell their stake in the company through a trade sale. If so drag-along provisions in the shareholders' agreement typically mean that the minority shareholders (and possibly the management) will also have to sell their equity interest to the acquirer. Therefore, subject to the negotiations, the acquirer will have full freedom to reorganise the target company and its management team.

Given the current volatility of the markets, investors tend to prefer cash in the pocket exits to IPOs and do their best to avoid earn-out clauses.

Capital gains resulting from the sale of portfolio companies are subject to tax according to the tax status of the seller:

  • French corporate entities may benefit from an 88% exemption if they have held their shares in portfolio companies for at least two years.

  • French individuals are subject to income tax at the progressive income tax rates.

    They could benefit from a discount from 20% to 40% for holding periods.

    However, certain individuals could benefit from the fixed rate of 19%. In addition to the above mentioned rates, capital gains are subject to social contributions at the rate of 15.5%. In a cash-in transaction through a contribution of the shares to a new vehicle (such as owner buyouts), they can benefit from a tax deferral.

  • Non-French sellers are exempt from capital gain tax, unless they held 25% or more of the portfolio company, in which case the tax rate depends on their state of residency.

 
33. What forms of exit are typically used to end the private equity fund's investment in an unsuccessful/distressed company? What are the relative advantages and disadvantages of each?

The French bankruptcy process is quite long and complex and its results are generally uncertain. Before shareholders, creditors or the relevant Commercial Court decide to engage the bankruptcy process, investors usually look for alternative options.

Investors can decide to sell all or part of the assets of the company, which can be attractive for potential acquirers. Sellers must carefully analyse the tax constraints resulting from such a transaction. Once the sale is completed, the cash can be distributed to the shareholders through dividends or a voluntary winding-up. However, if the company has many losses and creditors, this kind of distribution may not be feasible.

Investors may decide to sell their shares for a very low price. However, for the sale to be valid, the purchase price must be "real and serious", the legal definition of which can vary according to a number of factors. In light of a low price, sellers may not grant any representations and warranties to the acquirer. This decision is sometimes taken on the basis of the results of a comparative analysis of the costs and liabilities that may result from a winding-up (voluntary or judicial) and the total amount of the losses to be incurred by the investor.

Investors and management may also keep in mind that they can more easily be held liable if wrongful misconduct is disclosed in the context of a winding-up.

 

Private equity/venture capital association

Association Française des Investisseurs en Capital (AFIC)

W www.afic.asso.fr

Status. AFIC is a non-governmental and non-profit organisation.

Membership. The AFIC has more than 280 active members and 200 associate members from all related private equity businesses.

Principal activities. The AFIC is an independent, non-profit organisation that represents and supports the private equity industry.



Online resources

Association Française des Investisseurs en Capital (AFIC)

W www.afic.asso.fr

Description. The AFIC is a non-governmental organisation that represents and supports the private equity industry in France.



Contributor details

Anne Tolila

Gide Lovrette Nouel

T +33 1 40 75 60 00
E anne.tolila@gide.com
W www.gide.com

Professional qualifications. Paris Bar, 1992

Areas of practice. Private equity; M&A, securities law.

Recent transactions

  • Representing ETF (Environmental Technology Fund) on its investment in the company ENABLON.
  • Representing Group Climater and its managers in a secondary LBO with Weinberg Capital.
  • Representing Ecomobilité Ventures on its three 2012 investments in Zilok Auto, Move About and EZ Wheel.
  • Representing INSIDE SECURE on its acquisition of Embedded Security Solutions (ESS).
  • Representing La Maison Bleue and its managers in a LBO with Activa Capital and EPF Partners.
  • Professional associations/memberships. CroissancePlus, member of the Capital Market Commission.
  • Representing Vermeer Capital Partner in the restructuring on the LBO on the Regie Linge Group.
  • Representing EOS Imaging in its acquisition of OneFit Medical.

Karen Noël

Gide Lovrette Nouel

T +33 1 40 75 60 00
E karen.noel@gide.com
W www.gide.com

Professional qualifications. Paris Bar, 1998

Areas of practice. Emerging business; private equity; M&A.

Recent transactions

  • Representing Teads Technology and existing founders and investors (including Partech International Partners and Elaia Partners) in the merger with Ebuzzing.
  • Representing DBV Technologies for its EUR30 million private placement on Nyse-Euronext Paris.
  • Representing Bpifrance in its EUR30 million investment in Talend.

Ann Baker

Gide Lovrette Nouel

T +33 1 40 75 60 00
E ann.baker@gide.com
W www.gide.com

Professional qualifications. New York Bar, 1981; Paris Bar, 1985

Areas of practice. Private investment funds.

Recent transactions

  • Representing a large secondary manager in the acquisition of several portfolios of fund interests, including venture funds and their registered manager, from French financial institutions.
  • Representing a French venture capital manager, for the fundraising of a new fund.
  • Representing Fondinvest Capital for various primary and secondary investments.
  • Representing institutional investors and family offices for their investments in various French venture and other funds, such as investments in AlpInvest Secondaries Fund V and Swan Cap Opportunities Fund.
  • Representing a sovereign fund and a European institution for their investments in various French venture and other funds.

Olivier Edwards

Gide Lovrette Nouel

T +33 1 40 75 60 00
E olivier.edwards@gide.com
W www.gide.com

Professional qualifications. Paris Bar, 1969

Areas of practice. Emerging business; venture capital; M&A.

Recent transactions

  • Representing the founders and the company in the sale of the investors' interest in Aldebaran Robotics to Amuse Three Corporation and the reinvestment by the same in Aldebaran Robotics followed by the purchase of Gostaï by Aldebaran Robotics.
  • Representing Spartoo in the Series D financings of respectively EUR15 million purchased by the existing investors (A Plus finance, CM-CIC Capital Privé, Endeavour Partners and Highland) and EUR10 million by Sofina.
  • Representing SoftBank in the Series D financing of EUR30 million in Criteo.
  • Representing Codenvy in a Series A USD9 million financing from Toba Capital and Auriga Ventures.

Professional associations/memberships

  • CroissancePlus - Co-chairman of the Legal and Tax Commission.

  • PME Finance - VP and Secretary General.

Christian Nouel

Gide Lovrette Nouel

T +33 (0)1 40 75 61 21
E christian.nouel@gide.com
W www.gide.com

Professional qualifications. Paris Bar

Areas of practice. Christian has an extensive experience in M&A transactions and in the structuring of acquisition for private equity funds and large companies. Christian advises, on a day-to-day basis, companies on their tax affairs, and entrepreneurs as shareholders of companies. In addition, he manages tax audit with the French tax authorities.

Recent transactions

These include transactions completed before joining Gide Loyrette Nouel.

  • Representing La Maison Bleue and its managers in a LBO with Activa Capital and EPF Partners.
  • Representing SK Capital in the structuring of the acquisition of the group IB Pharma.
  • Representing One Equity Partner in the structuring of the acquisition of a shareholding interest in Technicolor.
  • Representing a large US investment fund in the structuring of the acquisition of a French listed company.
  • Representing managers in the structuring of an investment vehicle for the acquisition of large companies in Africa.

Professional associations/memberships

  • Secrétaire Général of the Association CroissancePlus and Chair of the Tax Commission.

  • Co-founder and Secrétaire Général of the Fondation Croissance Responsable and Secrétaire Général of Nous Citoyens.

Rima Maîtrehenry

Gide Lovrette Nouel

T +33 1 40 75 60 00
E rima.maitrehenry@gide.com
W www.gide.com

Professional qualifications. Paris Bar

Areas of practice. Private Investment Funds.

Recent transactions

These include transactions completed before joining Gide Loyrette Nouel.

  • Representing a large secondary manager in the acquisition of several portfolios of fund interests, including venture funds and their registered manager, from French financial institutions
  • Representing a French venture capital manager, for the fundraising of a new fund.
  • Representing Fondinvest Capital for various primary and secondary investments.
  • Representing institutional investors and family offices for their investments in various French venture and other funds, such as investments in AlpInvest Secondaries Fund V and Swan Cap Opportunities Fund.
  • Representing a sovereign fund and a European institution for their investments in various French venture and other funds.

Matthias Grolier

Gide Lovrette Nouel

T +33 1 40 75 60 00
E matthias.grolier@gide.com
W www.gide.com

Professional qualifications. Paris Bar

Areas of practice. Private equity; M&A securities law; commercial law.

Recent transactions

  • Representing ETF (Environmental Technology Fund) on its investment in the company ENABLON.
  • Representing Group Climater and its managers in a secondary LBO with Weinberg Capital.
  • Representing INSIDE SECURE on its acquisition of Embedded Security Solutions (ESS).
  • Representing the founders and the company in the sale of the investors interest in Aldebaran Robotics to Amuse Three Corporation and the reinvestment by the same in Aldebaran Robotics followed by the purchase of Gostaï by Aldebaran Robotics.
  • Representing Highlife in a Series A EUR4.2 million financing from Sorin Group.
  • Representing Codenvy in a Series A USD9 million financing from Toba Capital and Auriga Ventures.

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