Groupe Parot #2

Presentation of the company

Created in 1989, Groupe Parot is active in the automobile sector. The group, managed by the Parot family, has 800 employees and is based in Bruges. The group owns 40 stores and represents more than 10 brands. It sold around 19200 vehicles in 2017.

The company’s main activities are:

• Distribution of passenger cars via Premium (BMW and Mini) and Automotive (Ford, Mazda and Mitsubishi) subsidiaries. The group notably acquired Bordeaux based Brienne Automobiles (BMW-Mini Distributor) in July 2017.
• Distribution of commercial vehicles and spare parts of the brands IVECO, Fiat Professional, MAN, ZF, Granalu, Krone, Nooteboom and TVI.
• Sale of second hand cars with the acquisition in June 2016 of VO 3000, a major used vehicle player with 2 platforms in Clermont-Ferrand and Poligny.

The company works with mainly with private clients and 1/3 are professionals.

The group is listed on Euronext.

Project Description

The company wishes to borrow 820 000 € over 36 months to finance the acquisition of office furnitures as well as the costs related to the integration of recently acquired companies. This project will be realised by the end of the year.

As a reminder, the Lendix lending community supported the Groupe Parot in November 2017 with 3 050 000 € to finance the acquisition of its headquarters near Bordeaux.

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.

The amount offered on the platform is limited to 401 800€, 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 440 463 000 € in 2017 and an experienced team, the group has a good track record combined with an acceptable operating margin.

The increase of turnover in the past 3 years is driven by the acquisition of companies as well as the launch of digital platforms. The group has significantly invested into these new sales channels which has impacted net results mainly for the years 2015 and 2017.

The forecast is based on the performance of 2017 financials taking into account 2018 realized as well as forecasted data.

The group has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,2 and an excellent financial structure, with a forecast net debt / ebitda ratio of 0,79 and a net debt / shareholder equity of 19%, car inventory financing has been adjusted with the value of underlying assets.

The analysis of the project leads to a credit rating of B+ and a 4,1% annual interest rate.

Strong points

• Good historical performance based on diversified client base as well as longstanding partnerships with manufacturers
• Good repayment ability with a forecasted FCCR of 1,2 reinforced by the support of banking pool and shareholders.
• The groups is one of the most important national distributor for several well known brands such as MAN and IVECO

Points of vigilence

• Post integration challenges for newly acquired companies
• Competitive sector at the national level

*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 (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.