Restructuring advisors in Paris told 9fin they’re increasingly working on French LBOs that never delivered post‑Covid. A flurry of deals availing of cheap funding during 2020 and 2022 have since faced a much tougher macro environment.
Some sectors looked attractive during Covid, such as lab companies providing much needed Covid tests, packaging and software. Others were classic carve-outs with equity stories built on efficiency, growth and consolidation narratives. Geopolitical tensions from the war in Ukraine in 2022 pushing up energy prices, US tariffs last year and the current war in Iran creating further price volatility, have dampened potential recoveries.
30 LBOs were completed in France between 2020 and 2022, according to 9fin data. That made France the busiest European country for LBOs during the period, just ahead of the UK. A staggering one-third or 10 of those 30 deals has since restructured or is looking worse for wear.
That marks France out as the country with the highest proportion of 2020-2022 vintage LBOs that are struggling, as well as the country with the highest nominal value of struggling LBOs, more than double the number of the closest contenders.
We’ll get into some of the numbers and the story behind...
