Marc Fiorentino discusses the strategic partnership between EuroLand and Leuwen Investment Bank, aimed at enhancing investment banking services for unlisted small-cap companies. EuroLand, with a robust portfolio, seeks to better navigate the unlisted market and identify future IPO opportunities. The collaboration will focus on M&A, fundraising, and debt solutions. EuroLand’s acquisition of a 25% stake in Leuwen is part of a plan for full control, with expectations for significant revenue growth and an eventual transition to Euronext Growth.
Strategic Alliance: EuroLand and Leuwen Investment Bank
Marc Fiorentino sheds light on the recent partnership between EuroLand and Leuwen, a niche investment bank that focuses on unlisted small-cap companies. EuroLand has been actively involved in advising on IPOs, capital increases, and debt issuances while also managing delistings over the past two years. With a robust clientele of 62 listed companies, EuroLand recognizes the growing interconnection between listed and unlisted markets. This collaboration aims to enhance EuroLand’s traditional investment banking services, such as M&A, fundraising, and financing advice, to better navigate the unlisted ecosystem and identify future IPO candidates. Fiorentino predicts a notable revival in IPO activity by the second quarter of 2025.
Creating a New Generation Investment Bank
The synergy between Leuwen and EuroLand aspires to establish a distinctive advisory entity for financial operations. The goal is straightforward: to be the go-to partner for high-growth companies by providing unbiased recommendations. Their services will span three primary areas: M&A, capital increases, and private debt fundraising, alongside traditional bank financing. The focus on supporting growth-oriented SMEs and mid-sized firms will ensure that they receive the same comprehensive services that large Anglo-Saxon investment banks offer to major corporations.
From a structural and human perspective, EuroLand has acquired a 25% stake in Leuwen through a capital increase, with plans to gain full control within two years. The combined teams, initially comprising 15 members from EuroLand and 6 from Leuwen, will unite to form a robust team of approximately 20 bankers, with plans to recruit an additional 7 staff members within a year. The newly formed entity expects to generate over €5 million in revenue in 2024, with a profitability rate exceeding 20%.
EuroLand Corporate, already listed on Euronext Access, is contemplating a transition to Euronext Growth as part of this merger, aiming to enhance visibility and facilitate share allocations for employees. Currently, the capital structure consists of 70% held by management and 30% in free float, with an intention for seven partners to form the majority stake post-merger.
Fiorentino anticipates a resurgence of IPOs in the near future, despite current slowdowns in the unlisted sector. The investment landscape is shifting, with certain sectors facing challenges in finding exits for funds, particularly in distribution and technology. However, positive market developments are in the pipeline, which may lead to the listing of promising tech companies in the upcoming months.
Addressing France’s economic challenges, Fiorentino advocates for a focus on mid-sized companies, paralleling Germany’s approach to strengthening these enterprises. He emphasizes the importance of better financing options for SMEs and mid-sized firms, asserting that investor taxation is favorable and regulatory constraints for listed companies are manageable. The key to revitalizing the market lies in improved public financial management and a commitment to support from market funds, such as BPI or CDC.
For further insights, you can access the 2023 management report of EuroLand Corporate.