M&A, HLD promotes cross-functionality

June 13, 2023

HLD

With 37 build-ups within the HLD Group since 2022, M&A plays an important role in the growth strategies of the Group's 22 holdings. However, from one company to another, depending on the period or the sector, but above all on the objectives linked to each acquisition, the approach as much as the execution of these operations differs. As a Group, HLD therefore brought together its holdings on Thursday 8 June to share their experiences and learn the best lessons from the most active companies in this field. Interview with Jean-Hubert Vial, the Partner behind this initiative.

M&A, a means of accelerating a business project

"We share a common vision with the management teams of our companies," explains Jean-Hubert Vial. "Within this framework, M&A is of course an effective way of consolidating expertise, strengthening a customer portfolio, extending geographical influence or helping to transform a business model... but it cannot be done at any price. Our aim is not to "pile on" build-ups. What counts above all is the value that the new company will bring to the project over the long term, in line with the roadmap we have set ourselves”.

With 22 portfolio companies and cumulative sales of €4.3 billion, the maturity levels of the HLD Group's holdings vary as do their strategies. For example :

- While 52 Entertainment has increased its sales by a factor of 15 since the arrival of the HLD Group, the real achievement of the 9 acquisitions made lies in its ability to become a world leader in ever-green games and to consolidate an offering that attracts more than 8 million active users to its platforms every month.

- Kiloutou, which has made 24 acquisitions since 2018, illustrates the Group's ambition to strengthen its European coverage with now 35% of its Sales outside France (Leader in Denmark and Portugal via 2 significant acquisitions made in 2022).

- Lastly, the transformation of TSG's business model to become a leader in sustainable mobility would not have been possible in such a short space of time without the 19 acquisitions made in 20 months to consolidate its expertise, particularly in alternative energies, and to enable rapid network transformation.

Acting as an "integrated" resource for each participation

"Our support is always ad hoc and we support our companies in different ways," continues Jean-Hubert Vial. "For the less mature companies in the portfolio, our role will be much more operational, from screening through to the negotiation phase, whereas for groups that are more experienced in the exercise, we will be in a pragmatic position to offer a different perspective and clarify the choices to be made. We are a resource that our companies can draw on according to their needs".

The trademark of Groupe HLD is the nature of the support it provides. As Jean-Hubert Vial explains, "We have sometimes set up an M&A department from scratch and supported its development for certain participations; for others, we take full charge of certain operations; we act as a sparring partner in certain cases of business diversification, or we arrange the financing... There are no rules: we have a facilitating role and expertise that should enable transformation".

In addition to this dedicated support, Groupe HLD has also set itself the goal of animating the community of its holdings around key issues by encouraging cross-functionality and the sharing of experience between portfolio companies.

Drawing on an inspiring cross-functional approach

On Thursday 8 June, 9 Groupe HLD holdings got together with the investment teams to share their approach in a very relaxed atmosphere, and to hear from Bruno de Kervenoael (Tessi) and Aurélien Guenot (TSG). "This 'horizontality' is highly beneficial, as it encourages exchanges between professionals who, at the heart of their respective companies, may encounter the same issues," continues Jean-Hubert Vial. "The mix of expertise, combined with real-life examples from our own companies, is very inspiring and helps to forge interesting links between the companies involved, as part of a country-based approach, for example”.

The "porosity of practices" was at the heart of Thursday's discussions, and the presentation of the "Mechanism for the alignment of interests put in place between the managers of the companies acquired by Tessi" gave Bruno de Kervenoael the opportunity to recall the importance of such a practice for creating value or limiting the risks involved in an acquisition. Using concrete examples, his presentation gave the other participants the opportunity to ask questions, to consider adopting certain practices and to continue their discussions together, well beyond the Apicius gardens.

Aurélien Guenot presented the integration process formalised by TSG as part of its build-up strategy. With 19 successful acquisitions in less than two years, the Group shared its tried and tested method, organised around a "Blue Book" (containing the main themes and questions to be shared during an integration) as well as the human dimension of the Country Managers.

"These meetings embody our DNA: a Group that supports its investments well beyond the capital. And we are proud that the richness of these experiences will enable our companies to continue their exchanges and help each other to grow," concluded Jean-Hubert Vial.