Billionaire Niel Eyes $750 Million Food, Garden Retail Deal

(Bloomberg) -- A blank-check firm backed by French telecom billionaire Xavier Niel is holding exclusive talks to buy a retail business selling garden supplies, food and pet-food business.

2MX Organic SA, a so-called special purpose acquisition company, wants to combine with InVivo Retail in a deal that gives the latter an enterprise value of 675 million euros ($750 million), according to a statement Thursday. The two believe a combination will help InVivo Retail cement its position in the gardening and pet nutrition markets in France while scaling up its food business at a time of growing demand for locally-sourced products.

The transaction is expected to close during the second half of this year. 2MX shares rose as much as 2.3% in Paris Friday.

2MX's initial investors also include banker Matthieu Pigasse, head of Centerview Partners's Paris office as well as supermarket chain owner Moez-Alexandre Zouari. The SPAC was listed in December 2020 in France with a two-year window to find a target.

InVivo Retail is owned by InVivo Group which is one of Europe's biggest agri-food businesses with annual sales of about 10 billion euros and 188 member cooperatives that represent more than half of French farmers.

Should the transaction go through, InVivo will be paid in newly issued 2MX shares. The combined entity will be 60% owned by grain trader InVivo, and the rest will be held by the three main shareholders as well as investors who joined after the SPAC went public, Pigasse said in an interview.

InVivo Retail generates only 10% of its 2.5 billion-euro revenue from the food division, partly via its Frais d'Ici stores. Pigasse said there's great growth potential since the business is backed by the biggest agricultural cooperative in France which includes 300,000 farmers. The combined entity will also have a 1 billion-euro war chest to do more M&A deals, the banker added.

Thierry Blandinieres, the current CEO of InVivo Group, said there's scope to boost the food distribution via its Jardiland and Gamm Vert as well as Frais d'Ici stores. He is set to become chairman of the combined entity.

InVivo Retail is capable of becoming a leader on the food category since it's at “the heart of the system,” Zouari said, adding he expects the food category to represent half of total revenue of the combined entity within the next five years. This push will come via the launch of a new local and fresh food distribution brand “Le Grand Marche- Frais d'Ici.”

Niel is known for his telecommunications, media, technology and real estate investments. Pigasse also owns media assets in France such as Les Inrockuptibles magazine, Radio Nova and music festival Rock en Seine.

Niel and Pigasse teamed up in 2016 to launch a vehicle for media acquisitions which led to the creation of Mediawan SA. Pigasse is also working with Artemis, the family office founded by billionaire Francois Pinault as well as Iris Knobloch, a former WarnerMedia executive, to find a target in the entertainment and leisure industries for the I2PO SPAC which listed in Paris last year.

Zouari owns 49% of frozen food retailer Picard and Lion Capital owns the rest.