G Capital

Presentation of the company

G CAPITAL is the holding company set up in 2018, by Charles Gatey, to acquire Stratégie Patrimoine, and active in the wealth management consulting sector. Stratégie Patrimoine, managed Eric Coatanroch, has 2 employees and is based in Vannes. Stratégie Patrimoine is an independant firm created in 1989.

The company’s main activity is: the wealth management advising of private clients.

 It receives recurring fees and commissions when products are marketed, and on the basis of the outstanding amounts held by clients.

The company works with financial partners (insurance companies, investment funds, real estate, retirement) for a total outstanding amount of 61 million euros spread over 360 individual clients.

Eric Coatanroch retires and sells his shares. His associate and portofolio manager, Mr. Bellec, sells his shares too, but stays as employee. The company organisation stays unchanged.

Charles Gatey wants to acquire the company. In 2007, he has created its independant firm G & R Patrimoine and now manages 6 employees. G&R Patrimoine has the same activity as Stratégie Patrimoine, for a total outstanding of 60 million euros spread over 400 clients. There will not have capitalistic link in bewteen Stratégie Patrimoine and G&R Patrimoine.

Project Description

The two associates Mr. Coatanroch and Mr.Bellec want to sell his wealth management consulting valued 1 550 000 €, valuation based on standard of the market. Mr. Gatey via a dedicated company wish to borrow 727 000 € over 84 months to finance the acquisition of the company, the balance will be financed by debt and personnal contribution. This project will be realised in the next few months.

This project is a Flexible Bridge Loan, an amortizable loan with a standard commitment for the first 9 months and the possibility of early repayment at no cost for the remainder of the loan term, even in the event of refinancing by other financial institutions.

Like all projects presented to individual lenders on October, it is co-financed by institutional lenders, experienced lenders and October management, subscribers to the October fund.

The amount offered on the platform is limited to 356 230€, which is in line with the regulatory limits.

Analyst’s Opinion

The borrower is a holding company dedicated for the acquisition whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried out on the financials of the target company.

With a turnover of 497 000 € in 2018 and an experienced team, the company has a good track record combined with a two-digits operating margin.

The variation of the revenue and the profitability are linked to the end of an exceptionnal contract. The forecast is based on the performance expected of 2019.

The borrower has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,20 and a strong financial structure, with a forecast net debt / ebitda ratio of 2,6 and a net debt / shareholder equity of 128% including the additional debt and the personnal contribution.

The analysis of the project leads to a credit rating of C and a 9,9% annual interest rate.

*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 (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 1,20.
• The buyer, Charles Gatey, owns a similar company since 2007 and a consistent external growth strategy.

Point of caution:

• Operationnal risk in relation with take over of a company.