Financière Guizot #3

Presentation of the company

Created in 2005, Financière Guizot is active in the wealth management sector. The company, managed by Binet Aymeric, has 2 employees and is based in Paris 15. The firm specialises in advising private clients on all aspects of their assets (taxation, investments, loans, etc.). It receives fees and commissions when products are marketed, but also on the basis of the outstanding amounts held by clients (particularly in life insurance). The activity is therefore by definition highly recurrent.

The company works with partners such as Aviva, Generali, Swisslife, etc. and advises more than 800 families in 13 years of existence.

Financière Guizot’s strategy consists in increasing its outstandings (historical portfolio + acquisition) in order to mechanically increase the commissions received, then to develop the acquired portfolio to capture new capital on new products (in particular units of account, riskier but also more profitable support).

Two client portfolios have been identified, OpenCaps (recently funded) and Ari conseil which generates €120,000 in annual recurring commissions.

Project Description

Mr. Hertel wants to sell his activity ARI CONSEIL valued 300 000 €, valuation based on standard of the market. Mr. Binet via his company wish to borrow 220 000 € over 60 months with 4 months of differed repayment to finance the acquisition of the underlying business company. The balance being financed by a vendor credit of 50 000 € over 5 years and a personal contribution

This project will be realised next month.

As a reminder, the Lendix lending community supported Financière Guizot in 2015 with 350 000 € and in 2018 with 462 000 € to finance the acquisition of client portfolios

Analyst’s Opinion

With a turnover of 779 000 € in 2017 and an experienced team, the company has a good track record combined with a two-digits operating margin.

Since 2016, the increase in sales and profitability is linked to the acquisition of new client portfolios, combined with a decrease in the executive’s compensation over the last year.

The forecast is based on historical financial performance by integrating the new client portfolios currently being acquired.

The borrower has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,15 and a strong financial structure, with a forecast net debt / ebitda ratio of 1,1 and a net debt / shareholder equity of 108% taking into account the personal contribution of the buyer.

The analysis of the project leads to a credit rating of C and a 7.5% annual interest rate.

Strong points:

• Good historical performance based on diversified client base.
• Good repayment ability with a forecasted FCCR of 1,15
• Strong turnover recurrence and experienced buyer

Points of vigilence:

• Individual activity

"*The multiple of CRFC at 1,15 means that the company has a safety margin of 15% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (Scores & Decisions, Corporate Banking File). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project."