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C.R.D. #2

presented by October France

€1,000,000

5%

60 months

B+

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Warning Lending money to SMEs presents a risk of capital loss and requires your savings to be immobilised.

location

Location

Saint-Dizier,France

activity

Activity

Business services

Presentation of the company

Created in 1994, CRD (Conception Réalisation Développement) is a company specialized in the installation of metal structures and piping. The company, managed by Patrick Gaillard, employs 70 people and is based in Saint-Dizier.

The company’s activity is the preventive or curative repair of piping systems and the installation or transfer of plants. CRD operates in the fields of oil, nuclear, food and foundry. The company masters all trades (project management, mechanics, boilermaking, piping) to ensure a complete service to its customers.

CRD works with 52 clients from various fields. The main clients are: Total, Raffinerie Du Midi, EDF and Cofely in energy, les Forges de Boulognes, Mennesman, Spie. The company carries out a small part of its activity with defence customers. It is involved in the refurbishment-installation of NATO air bases and pipeline networks.

There is little competition in the sector due to high barriers to entry. The activity requires a high level of quality, particularly in the nuclear and para-petroleum sectors. The company distinguishes itself mainly from the competition by the competence of its teams and its reputation among its customers.

CRD was taken over in July 2017 by the Turgsi group and Gaillard Industrie.

Project Description

As part of its growth, the company is developing an engine rental business for the port crane, river barge, mining machinery and generator markets.

For the second part of its project, the company wishes to borrow €1,000,000 over 60 months to finance the development of an ERP and the layout of the machines acquired.

As a reminder, in 2017, the Lendix lending community financed the first part of this project to the tune of €1,040,000 to finance the acquisition of machinery (engines and spare parts).

The amount offered on the platform is limited to 490 000€, which is in line with the regulatory limits.

Like all projects presented to individual lenders on Lendix, it is co-financed with institutional investors, sophisticated investors, and Lendix management, subscribers to the Lendix Fund.

Analyst’s Opinion

With a turnover of €9 281 143 in 2017 and an experienced team, the company has a good performance record in terms of activity combined with double-digit operating profitability.

In 2017, the increase in revenues is linked to larger contracts with its historical customers.

The forecast has been prepared on the basis of 2017 performance including the dividend increases intended to cover the maturities of the acquisition debt relating to the company’s recent acquisition.

The borrower has a good repayment capacity with a fixed charge cover ratio* (FCCR) of 1.09 and an excellent financial structure with a net debt to EBITDA ratio of 0.8 and net debt to equity ratio of 45.0% taking into account the shareholders’ contribution of €1,000,000 in shareholders’ current accounts.

The analysis of the project and the borrower leads to a B+ rating with excellent financial solidity and a rate of 5.00% per year.

Highlights

  • Good business history on a loyal customer base
  • Niche market and expertise with significant barriers to entry
  • Good repayment capacity with a CCRF forecast at 1.09 backed by shareholder support

Vigilance Point

  • Operational risk on new business.

The multiple of CRFC at 1.09 means that the company has a margin of safety of 9% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (Scores & Decisions, Corporate Banking File). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

*The multiple of FCCR at 1,2 means that the company has a safety margin of 20 % relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (ModeFinance, Crif, Cerved). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.