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Gear Group

presented by October France

€525,000

7.2%

60 months

C

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location

Location

Paris, France

activity

Activity

Commerce

Presentation of the company

Created in 2008, Gear Group started with the car business, then in 2012 they extended their business to motorcycles.

The company, managed by Cédric Potrel, has 44 employees and is based in Paris.

The main activities of the company are:

  • Sale of new vehicles
  • Sale of used vehicles
  • Sale of spare parts and maintenance services.

Gear Group is today one of the main distributors of the Triumph and Indian brands in France. The group also represents other brands such as Husqvarna and KTM.

One of the group’s flagships is located on rue Bastille in Paris.

Project Description

The company requests a loan of 525 000 € over 60 months, with 3 months of deferred repayment, to finance the development of a new dealership (store design and recruitment) in Paris and the moving of the existing Husqvarna Pontault-Combault dealership to a 420m² premises with more potential. 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.

This project is a medium-term loan with a capital amortisation deferment and as such presents a different method of capital repayment than standard projects. The first 3 months, the lenders will only receive interest; the following 57 months, the lenders will receive interest and principal amortization. This principal repayment profile matches the borrower’s financing needs while allowing lenders to earn a higher amount of interest.

The amount offered on the platform is limited to 257 250€, which is in line with the regulatory limits.

Analyst’s Opinion

The borrower is a holding company whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried out on consolidated financial statements, which reflect the group’s performance.

With a turnover of 15 612 000 € in 2017 and an experienced team, the group has a good track record combined with a strong operating margin.

In 2017, profitability is rising thanks to volume purchase and higher end of the year suppliers’discount. The forecast is based on the performance of 2017 integrating new acquisition in 2018 as well as projected data following the new opening dealership in Paris.

The group has a correct repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,43 and a strong financial structure, with a forecast net debt / ebitda ratio of 2,2 and a net debt / shareholder equity of 175% after partial deduction of the projected group’s stock value and integrating shareholders’ loan as well as personnal contribution from the shareholders to fund the new projects as quasi equity.

The analysis of the project leads to a credit rating of C and a 7,20% annual interest rate.

*The multiple of FCCR at 1,43 means that the company has a safety margin of 43% 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.

Strong points:

  • Good historical performance based on diversified client base composed of new users as well as returning clients.
  • Correct repayment ability with a forecasted FCCR of 1,43 reinforced by the support of banking pool and shareholders.
  • The group is one of the leader in its market and represents well known brands with strong history and recognition.

Point of caution:

  • Fast growing group.