For 16 years, personal equity firm Montefiore Investment has actually prevented the spotlight while making little investments in travel and other sectors– with its best-known travel deal being its sale of Automobile Escape Group to Expedia Group. But in the previous year, Montefiore has actually gotten a very public function in assisting several French travel companies leave the pandemic trough.
When 16 French institutional investors created an around $210 million (EUR173 million) fund to assist the country’s tourism and leisure companies throughout the pandemic, they looked for applications from a few dozen firms and institutions to manage it. Last October, Montefiore was selected by the French Insurance coverage Federation to lead the new fund, called Nov Tourisme– Relance Resilient France.
Montefiore is a Paris-based private equity company that handles about $2.74 billion (EUR2.3 billion) of equity, about 43 percent of which it raised in 2019.
It individually has discretionary management of the Nov Tourisme fund, choosing which French business in the tourism, dining establishment, and leisure sectors the fund will bet on.
The Nov Tourisme fund’s check sizes balance in between $6 million (EUR5 million) to $18 million (EUR15 million). The fund takes equity or quasi-equity stakes, generally ending up being a minority investor. The fund has released about $85 million (EUR70 million) of financial investment so far.
Travel business the Nov Tourisme fund has actually bought include Voyageurs du Monde Group, a travel agency group whose holding business is Avantage. Nov Tourisme invested as part of a $155 million (EUR130 million) fundraising revealed in March that generated financial investment firm Certares, with involvement from existing financiers Crédit Mutuel Equity, Bpifrance, and BNP Paribas.
“It has a fantastic, profitable business model when there isn’t a pandemic,” stated Eric Bismuth, CEO of Montefiore Financial Investment. “It has absolutely no financial obligation and a lot of cash.”
Voyageurs du Monde creates bespoke, complicated, multiday trips with its Voyageurs du Monde and Comptoir des Voyages brand names. They help make travel representatives more effective through tech tools, with agents planning and servicing getaways through a mix of calls and chat-based interactions with customers.
“It provides bespoke travel directly to consumers with a digitally enabled service design,” Bismuth said. “So it’s not taking on others on the sales of a standardized offering.”
International rivals consist of Audley Travel.
The group also offers experience travel with its Terres d’Aventures, Allibert Trekking, and Nomade Aventure brands.
As the pandemic subsides, the next strategic relocation by the investors is to help even more internationalize the group’s brands through targeted acquisitions.
“The business’s international direct exposure remains rather small at this stage,” Bismuth said. “It needs to be positioned to speed up.”
Bets on Travel Experiences and Activities
Nov Tourisme has actually likewise invested earlier this year in Paris Expérience Group, which runs specialized traveler excursions. The group’s brand names in the tours and activities area include Paris City Vision, Paris Seine, and Localers. The brand names were serving about 400,000 guests a year before the pandemic.
Nov Tourisme took a significant minority share (well above, say, 15 percent), representing a capital raise of about $13 million (EUR11 million). Paris Experience Group has actually been controlled since 2015 by Ekkio Capital. Montefiore is tweak the group’s method, aiming to minimize its debt while searching for back-office and marketing performances in between its 2 brands specialized in excursions and cultural activities.
The fund has also bet on MMV, an expert in mountain holidays in France. Nov Tourisme participated in a $19 million (EUR16 million) capital raise that included co-founder Jean-Maorc Filippini, Bpifrance, and Arkéa Capital. MMV has taken advantage of an increase in domestic European holiday travel. It recently employed a new chief operating officer to speed up the business’s growth through the opening and acquisition of hotels and club houses in the Alps.
Active Financier in the Travel Market
The option of Montefiore to run the Nov Tourisme fund highlighted the firm’s high regard in France for its financial investments in travel and tourist.
“Among our key qualities is our ability to support the development of tactical thinking at companies and, as required, to recommend the best method to execute components of a method,” said Bismuth, the president of Montefiore and a previous handling director at Boston Consulting Group.
About 30 percent of the company’s cumulative financial investments given that its starting in 2005 have actually remained in the travel sector, Bismuth said.
Montefiore’s best-known travel sector exit from an investment was probably its sale of Car Escape Group, a European online automobile rental business, to Expedia Group in 2014. Expedia didn’t disclose the purchase rate, and folded the group into its CarRentals.com brand.
Its largest holding is European Outdoor camping Group. It likewise has stakes in trip company Voyageurs du Monde, the cruise travel distributor Cruiseline (formerly called QCNS Group); and the online travel bureau Misterfly.
Montefiore normally takes a strategic, long-lasting technique to its financial investments.
“We’ve had the ability to stimulate and sustain lucrative growth in our portfolio companies,” Bismuth said. “The businesses in which we have bought– and not simply the very best ones, however all of them, throughout sectors– have actually grown their toplines 18 percent a year typically over the past decade.”
The travel business in its portfolio had, nevertheless, a rough 2020.
Helping Travel Business Strategize for Development
Private equity has actually swept back into the travel sector during the pandemic. It has a chance to learn from previous mistakes and utilize less utilize and intricacy in today’s deals. Think about Montefiore’s light touch in its history of investments.
Bismuth stated his group doesn’t look at distressed assets however rather looks for to invest in business with good designs for applying the jet fuel of growth capital. He was especially proud of his team’s contribution to the success of B&B Hotels, a France-based hotel company and a former financial investment. Its story reveals the contours of Montefiore’s technique as a personal equity firm.
In 2005, B&B Hotels was an independent, budget plan chain which had 45 homes at sometimes, Bismuth stated. Montefiore teamed up with private equity company Eurazeo to get B&B Hotels from Parquest Capital and Duke Street Capital for EUR385 million (around $460 million).
Montefiore and Eurazeo assisted the chain grow to about 223 residential or commercial properties by 2010, when Carlyle Group took an 80 percent stake for $645 million (EUR480 million), while Montefiore kept a 15 percent stake, with the founders owning the rest of the equity. In 2016, personal equity firm PAI Partners took over B&B Hotels with Carlyle and Montefiore Investment selling in a deal that valued the company at $882 million (EUR790 million).
The B&B Hotels chain now has more than 620 hotels with about 55,000 rooms, making it the third-largest French hotel business after Accor and Louvre Hotels.
While a minority tactical shareholder, Montefiore helped reposition B&B Hotels’ brand name to an “econochic” category, indicating it assisted make it hipper and moved it to the greater end of the budget plan sector.
Montefiore also acknowledged that quickly scaling B&B Hotels through acquisition would help the chain reach a critical size and make international advancement lucrative by making brand marketing investments rewarding and finding functional performances. Over ten years, Montefiore saw the company go from approximately $95 million (EUR80 million) a year in sales to approximately $415 million (EUR350 million) a year.
Other investments have been comparable in taking mid-sized gamers and scaling them up.
A Cruise Bet Gone South?
In 2017, Montefiore took a roughly 80 percent stake in Monaco-based QCNS Cruise (known as Cruiseline), which distributes cruises online through its numerous websites, such as croisieres.fr, Cruceros.es, croisierenet.com, and its call center. Debtwire reported at the time that the deal was valued in the around $80 million (EUR70 million) range.
In between 2017 and 2019, Montefiore saw Cruiseline improve its turnover from EUR128 million euro to about $200 million (EUR170 million) a year.
“We took it from a leading position in France to the number-one position in France, in Spain, Italy, and parts of South America,” Bismuth said.
In February 2020, Montefiore announced it had actually closed a deal to offer its stake to Abénex, another private equity company.
“We had actually signed an agreement to offer business pre-Covid, however the buyers forgot to come,” Bismuth stated. “So there’s a lawsuit.”
Not Afraid of Consumer-Facing Travel Services
Some France-based travel services have revealed stronger-than-expected strength during the crisis, and it is mid-market, rewarding business that have most interested Montefiore traditionally.
In 2017, Montefiore made a minority investment in MisterFly, an online travel bureau that disperses to consumers, business-to-business, and through affiliate sales with a variety of innovations for the French market. Montefiore accompanied Vente Privée, a French seller that also owns flash travel sale brand Voyage Prive, to invest $20 million to fund accelerated development for the company.
With the assistance of Montefiore’s recommendations and capital, MisterFly went from about $110 million (EUR100 million) in sales in 2017 to about $600 million (EUR500 million) in sales in 2019, Bismuth stated.
Today, Montefiore’s biggest direct investment in the travel sector is the European Outdoor Camping Group, which provides stays in high-end campgrounds in France and Southern Europe to customers from the United Kingdom, France, and Northern Europe. Its main brands are Homair Vacances, Eurocamp, and Al Fresco Holidays.
The Group owns and manages more than 20,000 mobile homes topped 300 sites in Europe and served more than 1 million travelers a year before the pandemic.
In 2006, Montefiore Financial investment took a majority stake. It worked with the founder to change the French small company into a European leader– increasing turnover and business value tenfold. The group went public in 2007, but Montefiore has remained included.
In 2015, Montefiore Financial investment became a tactical minority investor in a deal with Carlyle that took the group personal once again. The camping group has since obtained companies such as Eurocamp in the UK, making use of synergies and frequently purchased campsites, lodging quality, and the management structure. The group produced about $430 million (EUR360 million) in yearly sales in 2019.
“The market is much larger than glamping,” Bismuth said. “European Outdoor Camping Group has a chance to be what Club Med was 30 years back in becoming a reliable, comfortable, budget-friendly trip brand for families.”