Interview with Philippe Hottinguer Finance

Interview with Eloi d'Halluin, Analyst in Corporate Finance at Philippe Hottinguer Finance

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I am Eloi, an analyst in corporate finance at Philippe Hottinguer Finance, a Parisian M&A boutique founded approximately twenty years ago. My role primarily involves executing the assignments entrusted to us, which includes both the financial aspects and the preparation of documents we send to investors. Additionally, I am involved in the search for potential counterparties.

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At PH Finance, we specialise in the small and SMID cap segment, which means we handle valuations ranging from a minimum of 2 million to a maximum of 200 to 250 million. We truly offer a comprehensive service. Of course, we handle the classic M&A operations such as fundraising, sales, and external growth. But we go beyond that by also providing corporate governance consulting, financial strategy advice, and even wealth management and tax advisory services, for example.

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What we offer our clients is truly the optimization of their processes. It's important to know that we only take on about 25 to 30 mandates per year. This allows us to dedicate substantial resources to each project to ensure its success. Additionally, we implement highly innovative solutions because our group includes not only the M&A teams, which I represent, but also a financing department that focuses on balance sheet management, and a private wealth management division that specializes in wealth management and taxation.

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It’s important to note that right after COVID, we experienced a golden age for M&A in France and Europe, with a significant number of transactions and unprecedented valuations. Unfortunately, this was much less the case in 2023. As everyone knows, there were a lot of political, economic, and geopolitical uncertainties, including the resurgence of war in some continents and Europe. Consequently, executives had less confidence in the context. In 2024, fingers crossed, we're seeing a resurgence in transactions. We estimate a roughly 6 to 7% increase in transaction volume compared to the same period last year. However, the downside is that in terms of valuation multiples, we've seen a notable decline. We're averaging 8.9 times EBITDA. So, we're hopeful things will improve in the second half of the year. We’ll keep you updated at the end of the year.

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In recent months, we've observed significant dynamism in one particular segment: B-to-B services. This sector is quite broad, encompassing cybersecurity, IT outsourcing, and ESMs in general. There's a strong attraction to this segment. On the other hand, compared to last year, the healthcare sector is somewhat lagging because it appears there's less funding available. Naturally, less funding means less interest in the sector.

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We’ve noticed a significant professionalization of the M&A sector, with processes becoming increasingly lengthy. We might close deals in ten, twelve, fourteen, or even sixteen months at times. These are very demanding and prolonged processes. This underscores the necessity for executives to have excellent advisory support and the right tools.

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It's true that the transactional world can be somewhat unfamiliar to executives, especially those of SMEs. That’s why M&A boutiques like ours exist. We often recommend that the executives who approach us take the time to deeply consider their needs—financial, strategic, structural, etc. We also advise them to choose a bank that truly aligns with their needs and in which they have full confidence.

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