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Joffe & Associés advises Redman on its capital raise with Omnes Capital. Founded in 2007 by Matthias Navarro and Nicolas Ponson, the Redman property group announced on Monday 23 January 2023 that it had secured its first round of funding from Omnes. This initial funding round totalled over 20 million euros.
The B Corp certification: a key selling point
Having opened up its share capital to its employees in 2020 to the tune of around 10 per cent, Redman took a further step in its shareholder structure at the end of last year. The French property developer, which specialises in low-carbon urban regeneration and redevelopment projects, has opened up to Omnes, a fund specialising in private equity and infrastructure that is committed to ESG principles.
Launched last summer, Redman’s capital increase attracted several French and foreign investment funds, which were particularly drawn to one key selling point: the property developer, a mission-driven company, holds B Corp certification. It is even “the only one in France” to have obtained such certification. The company’s business model – which goes beyond that of a simple property developer – cannot be reduced to a simple EBITDA multiple. Throughout this process, the parties instead based their calculations on discounted cash flow (DCF), given that property restructuring accounts for nearly half of its business.
A joint venture launched to acquire value-add assets
The group’s intention is clear: Redman’s majority shareholders, co-founders Mathias Navarro and Nicolas Ponson, sought to partner with a minority shareholder to accelerate their plans to decarbonise existing buildings. A shareholder who is also focused on the city of the future, low-carbon operations and ESG.
Like Redman, the private equity fund – which also focuses on infrastructure – is working to reinvent and rebuild the city from within. Its first fund, CEP 1 – also focused on the top end of the balance sheet – has made around ten investments, totalling 300,000 square metres, including Geophoros with Bouygues Immobilier, a €100 million fund targeting property assets valued between €5 million and €15 million. In the same vein, Redman and Omnes have decided to double this capital increase by setting up a vehicle to acquire existing value-add, or even opportunistic, assets, with the alignment of interests kept confidential. Redman sources the transactions through its already identified pipeline. Omnes provides equity financing, supplemented by leverage.
Through this joint venture, they aim to transform assets even if they have not yet obtained the necessary regulatory approvals, given that Redman already possesses expertise in setting up development funds designed to hold assets requiring restructuring.
Asset acquisition: a priority target
The joint venture’s focus is on existing buildings, where all or part of the structure can be retained, as well as brownfield sites requiring more extensive urban regeneration. This is a risky strategy involving significant construction costs, given that these have risen due to inflation and the upheavals of recent years (the health crisis, the war in Ukraine, the energy crisis, etc.).
According to market data, this rise in construction costs ranges from +15% to +30% for high-end projects. It is worth noting that between 2020 and 2021, the cost of constructing an office building in Paris was estimated at between €3,000 and €4,000 per square metre. The fund hopes to make its first investments by the end of the first half of the year or during the second half, in the Île-de-France region, as well as in major French cities; Redman has a presence in the south-east, with an office in Aix, whilst also expanding into western France.
€100 million in turnover in 2023 and a doubling of that figure within three years
As the only French property developer to hold ‘BCorp’ certification, and having generated nearly 90 million in turnover in 2022, Redman will exceed 100 million euros in turnover in 2023 and, thanks to this fundraising, will be able to exceed 200 million euros within the next three years. Among other things, this transaction will enable the group to step up its expansion across the whole of France. A new milestone for the development
Redman now operates throughout France, with offices in Paris, Lyon, Bordeaux, Aix-en-Provence and Montpellier, employing nearly 70 staff in property development and over 170 across the group as a whole. For the past seven years, it has also been active in Africa, in Dakar, where it develops bioclimatic and bio-based buildings, operating across three business lines: property development in the commercial, residential and hospitality sectors (as an investor and operator in the hotel industry).
“We are delighted to be formalising such a partnership with a specialist and committed player like Omnes. We had already opened up the group’s share capital to employees in 2020; this new step marks a turning point in Redman’s history,” says Matthias Navarro.
Investor: OMNES CAPITAL (ENR & BATIMENT DURABLE) , Gonzague de Trémiolles
Redman’s lawyers: JOFFE & ASSOCIES, Aymeric Dégremont, Charlotte Viandaz
Omnes’ lawyers: JEANTET, Philippe Raybaud, Thibault Willaume, Warda Zekraoui
Financial VDD: NEW DEAL FACTORY (NDF), Florence Valentin, Benjamin Piquet, Thomas Feneon
Redman M&A Advisory : CLEARWATER INTERNATIONAL
