HLD, the French sponsor backing companies such as Kiloutou and Rafaut, has an investment capacity of roughly EUR 1bn to be used in the next five years, as it considers making new acquisitions and supporting its portfolio companies with bolt-ons, co-founder Jean-Bernard Lafonta said.
This capacity represents HLD’s reserves, proceeds from potential portfolio companies’ exits, refinancing of its businesses, as well as debt it could take on, Lafonta said.
The firm typically invests tickets ranging from EUR 10m to EUR 250m, he said, adding that it can invite its shareholders to directly co-invest in acquisitions.
This was the case in the EUR 1.5bn-takeover of equipment rental company Kiloutou, which HLD bought alongside Dentressangle Initiatives from PAI
Partners and Sagard in 2017.
HLD has historically made two to three acquisitions every year, Lafonta said. However, it does not have a yearly target and could instead focus on developing its portfolio companies for a year or two if no interesting opportunity arises, he added.
The firm has a sector agnostic approach, with a preference for companies that have growth prospects supported by long-term socioeconomic trends, Lafonta said.
As such, population ageing was the factor supporting HLD’s acquisition of French home care services provider Elivie, for instance, while digitalization of traditional businesses supported the firm’s investment in online bridge platform Funbridge, he added.
Besides France, HLD has offices in Luxembourg, Zurich and Milan, and its team is currently looking for investment opportunities in those regions, Lafonta said.