In 2011, LGI found itself confronted with the challenge of gradually transferring equity and managerial control. Initiative & Finance acquired a majority stake via a custom MBO to pave the way for a transition towards, ideally, a takeover by the close associates of founding CEO Alain Grignon, who wanted to leave.
Initiative & Finance’s support, led by Jean-Bernard Meurisse and François Golfier, was decisive in preparing for the succession to Alain Grignon, and in choosing and putting in place the new president, Xavier Roger, an internal appointment. Initiative & Finance incorporated progressive liquidity for Alain Grignon in the takeover deal, then orchestrated a second round enabling the management team to take control of the group. Finally, in January 2019, a third round strengthened the management’s control of the firm’s equity, their stake rising to 95%, and marked the exit of Initiative & Finance.
“The first stage of our collaboration with Initiative & Finance was the change of management after Alain Grignon’s departure, remembers Xavier Roger, current CEO of LGI. The deal was apparently complex, but the fund enabled us to take over the company, which we could not have done without them.”
Initiative & Finance then worked with LGI on a made-to-measure solution. Having ruled out joining a large industrial group, managerial continuity was required. Among many possible candidates (three in-house, one from outside the firm), Xavier Roger was chosen to take over the reins. It was also a good idea to offer the founder partial liquidity once the management handover had been confirmed.
LGI was developing at a fast pace, and Initiative & Finance reinforced its support to help drive its organic and external growth. « LGI completed the minor acquisition of an existing client in the United States, which gave it a physical presence in order to grow its revenue there, » says Jean-Bernard Meurisse.
LGI, which already had a sales office in China, was thus aiming to develop further in the US and then open up to new external growth opportunities, though ” its atypical model was not necessarily going to take it down that route, “ concedes Xavier Roger.
Not wanting to be penalized by the company’s good results and run the risk of no longer being able to buy it, the three new managers wanted to acquire a majority stake quickly.
A second deal was set up in 2014, taking effect in May 2015. « We diluted our equity interest to become minority shareholders, with LGI’s managers taking a majority stake. A new investment fund, GCI (Idia Capital Investissement) came in at this point », explains Jean-Bernard Meurisse. When Initiative & Finance left the LGI deal, in January 2019, a third round was carried out, giving the management 95% of the group’s equity, with the remaining 5% still owned by Idia.
President, Initiative & Finance
“We were won over by the quality of the LGI Wines team. They are competent people, passionate about what they do, and most of them are enologists. They have real commercial acumen in their approach to clients, and are able to meet clients’ needs much faster than other players in the sector. We really liked their business model based on partners, with limited investments and considerable cash flow generation. The story of LGI is an admirable one in many regards, all the more so given that the company has developed in the wine sector, which, due to its track record, investors do not always see as particularly attractive. We enabled a team with a very small minority stake to acquire a 95% interest after two rounds, with 12 executives among the shareholders, as opposed to the initial three. Finally, the company’s revenue grew from €29 million to €65 million in eight years, which shows that this was a good deal financially, too!”
“We are happy with the progress LGI Wines has made. It’s a great example and a perfect illustration of what we are capable of at Initiative & Finance, and the sometimes complex situations we can face,” says Jean-Bernard Meurisse. “We had to come up with the most suitable solution to their challenge and meet their needs as closely as possible. It was a great team effort, and we are delighted to have played our part in it.”
CEO, LGI Wines
” The development and quality of our business enabled us to have a very relaxed relationship with Initiative & Finance. They gave us a great deal of freedom and we were always able to count on their support. They accepted our decisions willingly and gave us lots of structural and financial advice. They had to be bold to put their faith in us. Without Initiative & Finance, no bank would have agreed to back us! “