Advent to test choppy buyout market with sale of France's IDEMIA -sources

Atossa Therapeutics

01/09/2022 16:48

By Julien Ponthus, Mathieu Rosemain and Emma-Victoria Farr
    PARIS/FRANKFURT, Sept 1 (Reuters) - Private equity group
Advent is set to launch the sale of French biometrics and
fingerprint identification firm IDEMIA, sources familiar with
the matter said, in a multi-billion euro deal that will test a
choppy buyout market this autumn.    
    Goldman Sachs and Rothschild have been mandated by Advent
and are expected to launch the sale imminently, sources close to
the deal said. The two banks, IDEMIA and Advent all declined to
comment.
    The timing of what would be one of the biggest private
equity deals of the year in France is not ideal from a seller's
point of view.
    Wall Street's Nasdaq  .NDX  has lost about 25% year-to-date
and the European tech index has plunged over 30%. 
    The valuation of tech companies typically suffers when
interest rates rise, as they cut the appeal of the distant cash
flows of fast-growing companies versus safer government bonds.
    Sources said it was hard to value IDEMIA as a whole as some
bidders would likely only submit offers for its prized
biometrics and ID business and could make a pass on the unit
providing sim cards and payments platforms. 
    Sources have mentioned a rough value of 3 billion euros 
($2.98 billion) for the biometrics and ID business and about one
billion for the sim card operations, but precise valuations will
not be drafted until the company's data is accessible.
    The tightening of monetary policies and a slowing economy
have created a tougher environment for debt syndication,
hindering the ability of buyers to raise debt and compete in
auctions. 
     Major U.S. and European banks wrote down hundreds of
millions of dollars on leveraged loans in the second quarter 
and the bill is expected to rise.  urn:newsml:reuters.com:*:nL4N2ZR35P
    IDEMIA, which has been majority owned by Advent since 2017
and also counts state-owned investment bank Bpifrance as a
shareholder, provides facial recognition and identification
products for border control, working with government agencies to
verify travellers' identity. 
    Because of the sensitivity of these activities, a successful
bidder will need to get government clearance. 
    "There's a mix of French and U.S. authorities aiming to
protect their respective proprietary technologies (...) it 
won't be an easy deal for any industrial group," a source close
to IDEMIA said.
    French President Emmanuel Macron's pro-business government,
which otherwise seeks to attract international investors, has
strengthened its oversight over foreign investments. 
    The fact that IDEMIA has an international client base and is
already owned by a non-French entity suggests the French
government would not necessarily insist on finding a national
acquirer, sources said. 


($1 = 1.0060 euros)

 (Reporting by Julien Ponthus, Mathieu Rosemain and
Emma-Victoria Farr, editing by Silvia Aloisi and Susan Fenton)
 ((julien.ponthus@thomsonreuters.com; 02075426189; Reuters
Messaging: julien.ponthus.thomsonreuters.com@reuters.net))