DG Rénovation #2

Presentation of the company

Created in 2007, DG Renovation is active in the refurbishment sector. The company, managed by Giroux Dimitri, has 10 employees and is based in Thue et mue.

The company’s main activity is:

• the supply and installation of doors, gates, windows, roller shutters, verandas and PVC joinery.

The company works with private clients and architectes of the region.

The company has a big showroom open from monday to friday in the morning and afternoon.

The manager has two others companies : Structure Flamme specialized in the sale of stoves and Construction Rénovation Giroux specialized in masonry.

The three companies are complementaries, and allows to cover a large clients need.

One of DG Rénovation competitors, the company Michalcik is in legal redess and Dimitri Giroux wants to acquire it. Michalcik has the same activity as DG Renovation, is a historical company in the region and has a high end positioning. The company has been bought out few years ago by managers that did not come from the sector, the taking back has been difficult.

Project Description

The Michalcik ongoing concern is to sell and value 95.000 €, valuation based on the commercial court report. DG renovation wishes to borrow 53.000 € over 36 months to finance the acquisition of the underlying business company, the balance will be finance by personnal contribution. This project will be realised in the next few months.

As a reminder, the October lending community supported DG Rénovation in June 2016 with 75 000 € to finance the layout of the showroom.

The amount offered on the platform is limited to 25 970€, which is in line with the regulatory limits.

Analyst’s Opinion

The borrower is the main operating company. The financial analysis was carried out on the financials of DG Rénovation without taking into account the target company.

With a cumulated turnover of 1 168 000 € in 2017 and an experienced team, the companies have a good track record combined with a two-digits operating margin.

The decrease of revenue is linked to the development of the manufacture activity : the company had to postpone some contracts. The forecasted revenue of 2018 is better at 1,3M€. The forecast is based on the performance 2017.

The borrower has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,23 and an excellent financial structure with a forecast net debt / ebitda ratio of 0,6 and a net Debt / shareholder equity of 0,52.

The analysis of the project leads to a credit rating of C and a 7% annual interest rate.

*The multiple of FCCR at 1,23 means that the company has a safety margin of 23% 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 (External data provider). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points:

• Good historical performance based on diversified client base.

• Good repayment ability with a forecasted FCCR of 1,23.

• Experience manager of more than 10 years, very good reputation around Caen and company certified RGE.

Point of caution:

• Competitive sector.