PPM Ventures Buys French Distributor

PPM Ventures in mid-December acquired a majority stake in Orefi, a Lyon-based multi-specialist distributor of industrial supplies. The total deal funding of FFr 740 million (ecu 112 million) included working capital and finance for future acquisitions. Deutsche Bank provided the senior debt component of the funding alongside a mezzanine tranche from Intermediate Capital Group.

Orefi has more than 70 sales outlets covering all of France’s major industrial centres. The firm expects to generate FFr 65 million operating profit on sales of FFr 1.4 billion in 1998.

PPM Ventures acquired its stake from Orefi’s previous backers. Orefi’s founder, Pierre Brossette, is reinvesting in the new company, as are CEO Marcel Sengelin and other senior managers.

Marcel Sengelin said the introduction of PPM Ventures as majority shareholder leaves Orefi in a position to pursue an acquisition strategy to take advantage of the expected rationalisation of Europe’s industrial supplies sector. Jean-Lou Rihon of PPM Ventures commented “Orefi is a solid business with a strong market position. Our strategy is to support management in their efforts to increase Orefi’s share of the European market with a view to an eventual flotation”.

Orefi was the fourth European acquisition in 1998 for PPM Ventures, which expects to open a Paris office early in 1999.