You are Élodie Marchand, Group Head of M&A at Hexagone Matériaux, a Paris-listed coatings and materials group. A founder-owned Polish producer is for sale at 8.5 times EBITDA, a rival bidder is circling, and the investment committee meets in six weeks. Before anyone writes a price, you must decide how far diligence runs against that clock.
The situation
Hexagone has €2.1 billion of revenue, €357 million of EBITDA and net debt of 1.8 times EBITDA. The board has given you a mandate to enter Central and Eastern Europe by acquisition, and has capped post-close leverage at 2.5 times. The group is committed to net zero by 2040, and its lenders now price its debt against its environmental profile.
The target, PolnaChem, makes specialty coatings in Poland and earns €60 million of EBITDA. Its founder, Marek Polnicki, built it from 1994 and still owns it. His advisers ask 8.5 times EBITDA, about €510 million; comparable European coatings deals have cleared at 6.5 to 7.0 times, and every tenth of a turn is worth about €6 million. Treasury warns that paying the ask entirely in cash would take the group to 2.7 times.
Two preliminary dossiers sit on your desk. The environmental one: PolnaChem's carbon intensity runs 40% above Hexagone's, two sites operate without permits aligned to current EU standards, and fixing them is estimated at €45 million over three years. The trust one: Polnicki personally holds the largest customer relationships, the workforce is wary of a foreign owner, and your advisers' benchmark says that low-trust cross-border integrations lose 20 to 30% of the expected synergy.
You know that pattern. In 2021 you were deputy on Hexagone's Czech acquisition, priced on its financial statements; within eighteen months the people who held the customers had left. Since then the board requires both assessments, reflected in the price, before a deal reaches the committee. Doing both in depth needs access to the founder, his sites and his customers, and most of the six weeks; the rival is expected to table an offer inside them.