Eurosourcing Fresh & Frozen Food

WARNING

Unfortunately, you cannot lend to this project.

Why? This project* does not fall within the regulatory framework of October IFP, defined by the ordinance of 30 May 2014 (ordinance on participatory financing). It is therefore not offered to individual lenders as part of participatory financing.

According to the Ordinance of 30 May 2014, a project consists of a purchase or a set of purchases of goods or services contributing to the completion of a predefined transaction in terms of purpose, amount and timetable.

Presentation of the company

Created in 2005, Eurosourcing Fresh & Frozen Food is active in the Import-Export of frozen agri-food products sector. The company, managed by Jean-Charles Mirguet, has 12 employees and is based in Onville. The manager has always been in the retail sector. He is organizing the transfer of his company to his 4 senior executives for his retirement. They have a minimum of 10 years’ experience each. The transmission will take place within the next 24 months.

The company’s main activity is:

– trade of meat products (beef, poultry), potato products (chips and garnishes), seafood (salmon, pike-perch, cod, shrimp, surimi…) snacking (including dishes prepared with pasta, pizzas…).

The company works with mass distribution (Leclerc, Carrefour, Auchan, SuperU, Aldi, Monoprix) on the national territory as well as in Belgium, Germany and Portugal (Rewe, Carrefour, Aldi, Dia). Specialised circuits (Picard, Pomona, Trans Gourmet, Sysco France, Marie Surgelés, Frial…), collective catering (Compass group), Metro, Fast Food chains (Quick, Tacos, Speed Burger).

Eurosourcing also relies on a network of partners in Europe (Spain, Belgium, Netherlands, Germany, Austria, Italy…).

The target company Eurofroid is active in the trade of high quality frozen and appertized vegetables : fruit, vegetables with a range of organic products.

Eurofroid has also an integrated storage and packaging activity that is not included in this acquisition. The objective of this creation is to pursue the commercial relationship, invoicing and development under the Eurofroid brand. The target company will be operationally integrated into Eurosourcing’s premises using all organizational and logistical resources.

Project Description

The company is requesting a loan of €210,000 over 24 months to finance the stock of assets related to the acquisition of the Eurofroid target business. This project will be completed next month.

Analyst’s Opinion

With a turnover of 13 042 000 € in 2018 and an experienced team, the company has a good track record combined with an acceptable operating margin.

In 2017 the increase in turnover is driven by a one-off call for tenders with Pomona, which ended in July 2017. At 31/12/2018, turnover had returned to historical levels. The forecast is based on a cumulative vision of Eurosourcing and the target company Eurofroid taking into account costs savings on the drop out of packaging line and storage warehouse.

The borrower has a correct repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,12 and a good financial structure, with a forecast net debt / ebitda ratio of 3,14 and a net debt / shareholder equity of 253%.

The analysis of the project leads to a credit rating of C and a 6,5% annual interest rate.

*The multiple of FCCR at 1,12 means that the company has a safety margin of 12% 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 a solid key account customer portfolio.
• Correct repayment ability with a forecasted FCCR of 1,12 reinforced by the support of banking pool.
• Longstanding player with good growth potential following the takeover operation.

Point of caution:

• Business sector characterized by low margins.