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Lion Capital and Blackstone
Group: The Orangina Deal
Case Solution
May 31, 2014
Prateek Sanjay
Question 1: Why would Lion do a deal with Blackstone? Why would Blackstone do one
with Lion? What does each risk? What can each gain?
Lion and Blackstone are joining together to leverage industry expertise and financing power.
Lion has a strong understanding of consumer-focused brands and using proprietary deals to turn an existing medium-sized player into a larger busines by using it as a platform for acquisitions. Examples of such deals include Weetabix and Jimmy Choo.
Blackstone has the power to bring very large financing into a deal, capable of investing up to $1 billion in a company, while also having an international presence, bringing synergies across borders.
However, this partnership also brings in a lagging pace in closing deals and public visibility and scrutiny.
Lion typically moves quickly on deals, and already has decided ahead of Blackstone on timing and price. Blackstone, however, still needs to conduct due diligence and have the deal reviewed by the investment committee. Moreover, Lion’s partnership with Blackstone brings it into the Financial Times’ front page and pressures it further to perform.
Question 2: Is Orangina a good deal? It seems that Lion and Blackstone are paying a pretty full price; what angle might the Blackstone-Lion consortium have found to justify it? Yes, Orangina is a good deal, for its brand power, its resilience, its financing-friendly nature, and its operating and distribution network in France and Spain.
Orangina has iconic brands that are well known in France and Spain, and it commands a strong presence in its niche without intruding on the soft drink space of brands such as Coca Cola.
It can be levered easily, as it is in a defensive sector, has strong cash flows, and with tangible
Group: The Orangina Deal
Case Solution
May 31, 2014
Prateek Sanjay
Question 1: Why would Lion do a deal with Blackstone? Why would Blackstone do one
with Lion? What does each risk? What can each gain?
Lion and Blackstone are joining together to leverage industry expertise and financing power.
Lion has a strong understanding of consumer-focused brands and using proprietary deals to turn an existing medium-sized player into a larger busines by using it as a platform for acquisitions. Examples of such deals include Weetabix and Jimmy Choo.
Blackstone has the power to bring very large financing into a deal, capable of investing up to $1 billion in a company, while also having an international presence, bringing synergies across borders.
However, this partnership also brings in a lagging pace in closing deals and public visibility and scrutiny.
Lion typically moves quickly on deals, and already has decided ahead of Blackstone on timing and price. Blackstone, however, still needs to conduct due diligence and have the deal reviewed by the investment committee. Moreover, Lion’s partnership with Blackstone brings it into the Financial Times’ front page and pressures it further to perform.
Question 2: Is Orangina a good deal? It seems that Lion and Blackstone are paying a pretty full price; what angle might the Blackstone-Lion consortium have found to justify it? Yes, Orangina is a good deal, for its brand power, its resilience, its financing-friendly nature, and its operating and distribution network in France and Spain.
Orangina has iconic brands that are well known in France and Spain, and it commands a strong presence in its niche without intruding on the soft drink space of brands such as Coca Cola.
It can be levered easily, as it is in a defensive sector, has strong cash flows, and with tangible