The scene
10 February, a letter of intent: 8.0 times EBITDA — €3.1M in 2025 — within the sector's range. Three advisers consulted, three sound answers: the price is fair, says the accountant; the shareholders' agreement is standard, says the lawyer; the bank would follow with debt. None of the three bears on the decision. Answer required by 24 March.
Composite scenarios, drawn from real situations — the companies, people, figures and facts are fictional: they designate no existing organisation and no existing person. The method is the one we apply. This dossier is a demonstration — it reports no engagement result.
The valuation is not the issue — the order of operations is. The round, as structured, does not fund what needs funding. And the datum that would settle the matter will not exist until April — three weeks after the date by which you are asked to answer. So the first move is not an answer: it is a request for time.
The programme remains underfunded by €1.2M.
Of the €10.98M invested to hold 45% after the transaction, €3.0M enters the company; €7.98M buys your shares — and you keep exactly 55.0%. established letter of intent, § 2 and § 3; mechanism in the exhibits.
The share of the largest customer — a framework agreement renewing automatically, on six months' notice, with no volume commitment. The corresponding discount: 1.5 to 2.5 times EBITDA.
established ledger, contract · qualified for the discount — nine comparable transactions retained out of eleven reconstructed.
The imposed deadline falls three weeks before the one contractual meeting that would yield the missing fact. Nothing establishes that this calendar was chosen, and nothing establishes the contrary — the remedy is the same either way: it can be corrected.
Four courses investigated — one of them unmentioned by the letter — each with its cost and with what would have to be true for it to be the right one. This dossier recommends none of them: the choice commits your personal wealth, your tempo and your next ten years — it belongs to you. And a first move, dated: the request to extend exclusivity to 19 May.
Ten days. Your documents first — the ledger over three financial years, the framework agreement and its amendments, the draft shareholders' agreement, the production records, the business plan adjusted on two optimistic lines. Then the outside: eleven comparable transactions reconstructed, nine retained; five upstream players identified. In all, eleven sources and registers were interrogated; three returned nothing, and that is written down. Every statement carries its regime — and the most important fact in the dossier is marked not established, never filled in.
The red line, contractual: the machine never assesses a person · no decision is automated · the process is consented to and its findings returned · every conclusion is signed
Declared door — Leaders · The investigation of a decision
Investigation of the decision to open the capital — Laboratoires Valcourt
What is actually being decided, the four courses that are open, what each one costs, and the fact that is missing before you can settle it.
- Commissioned by
- Bertrand Ferrandis, chairman and sole shareholder.
- Decision investigated
- The response to Arète Capital's letter of intent of 10 February.
- What this is
- The investigation of your decision: what it commits, the courses genuinely open, and the price of each.
- Why now
- Twelve days separate you from the exclusivity deadline. Two of the four courses set out here remain accessible only while it is still running.
- What you do with it
- Settle the matter — and, should you choose to settle it later, know exactly what that delay costs and how to obtain it.
- Time
- The essentials: 3 minutes · the dossier: 10 minutes · the exhibits: on request.
established — a dated primary source · declared — said or published, unverified · qualified — an estimate or a calculation · not established — not found, flagged, never filled in
What you decide is not what you are asked to decide
You are asked to answer an offer. You commit three things, at three different horizons: a share of your personal wealth — 91% of your assets sit today in this company, and you are fifty-four; control of your company's tempo — a shareholders' agreement leaves you the majority; what it takes away is the freedom to decide the pace and the exit alone; and the value trajectory of what you do not sell.
The three opinions you have received are sound, and none of them could help you, because each answered within its own discipline. That is the mark of questions of consequence: they fall in the blind spot of everyone who advises you well.
A decision that commits three things at three horizons has no right answer in itself — it has one for you. This dossier therefore stops at the threshold: for each course, it states what would have to be true for that course to be the right one. And whether it is true, you alone can say.
The clock
Two lines command the calendar: the 24 March deadline, and the annual review of your largest customer's framework agreement, due during April under article 9 of the agreement of 14 April 2021. established agreement provided.
To these are added the extension quotation, which expires on 8 April, and the expiry of the finance lease on the current plant, at the end of 2027.
The deadline imposed on you falls three weeks before the one meeting that would yield the missing fact. Chosen or not — nothing establishes it, in either direction — this calendar costs dearly, and it can be corrected.
Three facts command everything else
The peak. The largest customer represents €8.55M of €22.4M of 2025 revenue — 38.2% — on a framework agreement renewing automatically, on six months' notice, with no volume commitment. established accounts receivable ledger; agreement, articles 3, 4 and 9. What the exhibit does not establish: the customer's intention, in either direction. The second customer weighs 11.3%, the third 6.9%: your portfolio has a peak rather than a concentration.
The discount. Across eleven comparable transactions reconstructed in cosmetic contract manufacturing and specialty pharmaceutical subcontracting (2021-2025), nine retained, companies whose largest customer exceeded 30% of revenue traded between 1.5 and 2.5 times EBITDA below the others, at comparable size and growth. qualified method in the exhibits. The reason is mechanical, and every acquirer applies it: the acquirer is buying a flow of which a third can disappear on notice, and it rarely funds with debt what it cannot secure. Brought back to your case: the 8.0 times on the table is the multiple of a concentrated company; the same company, with its largest customer brought below 25%, reconnects with the range of unconcentrated comparables — of the order of 9.5 to 10.5 times. qualified mechanism in the exhibits.
The plant. The main line runs at 85%. established production records. The quoted extension represents €2.6M, with eleven months to commissioning. established quotation of 8 January. Two consequences: your growth at 14% a year stops of its own accord in eighteen months if nothing is committed; and you cannot take on the new customers who would diversify your revenue, for want of the capacity to serve them.
The loop
The peak at 38.2% caps the value. Bringing it down means new customers — hence a sales force and production capacity you do not have. Together they cost €4.2M: 2.6 of plant, 0.9 of sales force, 0.7 of formulation and regulatory approval. established for the plant; qualified on the other two lines, costed with you. And €4.2M is precisely the order of magnitude for which one opens one's capital.
And this is where the structure of the offer changes the nature of the problem: of the €10.98M invested to hold 45% after the transaction, €3.0M takes the form of a capital increase — the money enters the company — and €7.98M that of a purchase of your shares: that money comes to you, it does not fund the programme. established letter of intent; mechanism in the exhibits.
Shortfall against the funding of the programme: €1.2M.
Solid gold: what enters the company · slate: what goes out to the shareholder · hollow: what would have to be funded. — established letter of intent of 10 February, § 2 and § 3 · extension quotation of 8 January. — Mechanism: enterprise value €24.8M (8.0 × 2025 EBITDA of €3.1M) − net debt €3.4M = equity value €21.4M before the transaction; a €3.0M capital increase → €24.4M after; 45% after the transaction = €10.98M, of which €3.0M primary and €7.98M secondary per § 3 of the letter. The shareholder, diluted to 87.7% by the primary, sells 32.7% and keeps 55.0%.
The company comes out of the transaction with a programme funded for €3.0M of the 4.2 it costs; you keep exactly 55.0%. This is an ordinary offer structure rather than a trap or an anomaly: no one had pointed out to you that it fell short of your need — because no one had costed your need.
The four courses
Accept, on the terms of the letter
€7.98M of immediate personal liquidity, lifting the concentration of your personal assets at fifty-four; a partner with means, with a network, with the habit of value-creation plans.
You sell at the multiple of an untreated risk; you enter a shareholders' agreement at the moment your need to invest is greatest and your bargaining power least; and the plan remains underfunded by €1.2M — which will resolve either through debt or through a downward adjustment that will no longer be yours alone.
Cumulatively: the diversification programme written into the value-creation plan of the shareholders' agreement, with its budget and its calendar; the €1.2M balance settled before signature; and the choice, made knowingly, to bear the discount rather than the risk of the interval — a perfectly defensible choice, provided it is made.
Defer by eighteen months, after diversification
You open on a cleaned-up base — the same stake, sold then at a multiple without discount, of the order of 9.5 to 10.5 times, on EBITDA taken to €4.0M if the programme delivers what your plan projects. qualified projections in the exhibits.
Funding the interval without the round — the bank indication of 6 March is verbal and non-binding — and eighteen further months with 91% of your wealth in a single asset.
And the condition is a heavy one: that the largest customer stay through the interval. It cannot be appraised as things stand — it is the named void of § 07, and the real reason why this dossier recommends a delay rather than an answer: the spread between the best and the worst outcome of this course hangs on that single fact.
Do not open the capital
Complete freedom over the tempo; the programme funded by bank debt and internally generated cash, over twenty-eight to thirty-four months rather than eighteen.
A ceiling on ambition, and the persistence of concentration in your personal wealth — a risk position, simply not named as one because it is the status quo.
That the ceiling be an explicit choice of life — running this company at your own pace, handing it on or selling later — rather than a deferred decision in disguise. It is the one course where the principal risk is not economic: it is rarely chosen, and often merely endured.
Separate what you are looking for from who can bring it to you
the one that is not in the letter
Two structures, one logic: what you are looking for — liquidity, new customers — does not have to come from the same partner.
The partner whose principal contribution is something other than money
What you lack is not capital first of all, it is access to new customers; an upstream player or a selective distributor brings exactly that resource, often part of the capital with it. Five players identified across France and Italy.
Four to eight months of search, a more complex negotiation, a fresh dependence to be bounded contractually.
That at least one of the five have a documented strategic interest in securing contract-manufacturing capacity — verifiable in three weeks, not investigated, the exclusivity in force forbidding it.
The leveraged transaction on your own holding company
Personal liquidity without giving up control of the tempo, and the opening of the capital in twenty-four months on a diversified base.
The holding company's debt service, taken from the dividends flowed up — you cannot take the liquidity and fund the diversification with the same euro; the trade-off is head-on.
That personal liquidity be your first need, and that the programme make do with an intermediate rhythm.
The first move
Three of the four courses require information that will exist only in April, or weeks of search. One course alone fits the time available: accepting. The 24 March deadline therefore does not ask you to choose among four courses — it asks you to take one, because it is the only one that fits the time available. This is an effect of the calendar rather than a result of analysis — and an effect of the calendar can be treated.
The first move this dossier investigates: a request for an eight-week extension of exclusivity, taking the deadline to 19 May.
Eight weeks cover the April annual review — the one meeting where the question of volume can be put without the asking signalling anything — and they leave three weeks to investigate course D1.
The real price of the request: it signals hesitation. It should therefore be motivated by what makes it legitimate — the review of a major framework agreement, an outcome any investor has its own interest in knowing before signing.
And what makes it credible rather than dilatory is prepared at the same time: the written formulation of what you will ask the customer in April — a multi-year volume commitment — and what you will offer in return — reserved capacity on the extended plant. The plan for the twelve days is in the exhibits.
What this dossier did not establish
The largest customer's intention over three years not established — this is the most important point in the dossier, and it is empty: no primary source establishes it, no usable public signal exists. What would settle it: a multi-year volume commitment, or an indication of trajectory at the annual review. Where: the April review, article 9 of the framework agreement. What it costs: nothing — the move is a normal one. What it changes: everything.
Three qualified points are added to it: the bank indication of 6 March, verbal and non-binding — courses B, C and D2 depend on it, and it should be confirmed in writing; the business plan, adjusted by us on two optimistic lines — the projections are built on that version, not on yours; the concentration discount, a robust order of magnitude rather than a measurement. And the strategic appetite of the five players in course D1 — not investigated, the exclusivity in force forbids it.
The investigation gridfive questions, in order
To investigate a decision is not to produce an opinion. It is to answer five questions, in this order — and the order is the method:
- 01
- What is actually being decided? Rarely the thing that is asked: here you are asked to answer an offer, and what you commit is your personal wealth, your tempo and the value of what you will keep. § 01.
- 02
- Which clock? What bounds the decision, and what the calendar rules out. § 02.
- 03
- Which courses are effectively open? Including those that are not on the table. § 05.
- 04
- What does each one cost, and what would have to be true for it to be the right one? § 05, and the drawer “The arithmetic”.
- 05
- What is missing before you can settle it, and how is it obtained? § 07.
It is this grid that produces the fourth course in § 05: a method that obliges you to look for the options no one has formulated ends up finding one. And it is the grid that produces the first move in § 06, by setting the fifth question against the second.
Every statement in this dossier carries its regime. Four grades, marked line by line:
- established
- A dated primary source founds it — a contract, a ledger, a quotation.
- declared
- Someone said it or published it. We have not verified it, and we do not hold it as given.
- qualified
- An estimate, a calculation, a secondary source. Robust, unmeasured.
- not established
- We did not find it. It is written down, and it is never filled in.
The rule that governs the other three: what is not established is never completed by a plausible inference. On this dossier that matters particularly — the most important fact sits at the fourth grade.
This dossier recommends none of the four courses. It investigates them. The choice rests on trade-offs that belong to you: your relationship to risk in your personal wealth, your own horizon, and what you want to do with the next ten years.
The arithmeticthe table of the four courses, the projections, the scenario the table does not show
| Immediate liquidity for you | Money entering the company | Capital sold | Value of your remaining 55% at 18-24 months | |
|---|---|---|---|---|
| A — accept | €7.98M | €3.0M | 45% | €11.8M to €13.2M qualified — 55% of an equity value of €21.5M to €24.0M, at a constant multiple (8.0 ×) and net debt of €3.4M, i.e. EBITDA of €3.1M to €3.4M |
| B — defer | 0 | 0 (debt: €4.4M) | 0 today, 45% thereafter | €17.7M to €19.9M qualified |
| C — do not open | 0 | 0 (debt: €4.4M) | 0 | 100% of an asset on a slower trajectory |
| D2 — holding company | €6M to €7M | 0 | 0 | control kept, programme slowed |
Mechanism of the projections: EBITDA taken to €4.0M (business plan of 28 February, adjusted on two lines — § 07); a multiple of 9.5 to 10.5 in the absence of a concentration discount; net debt projected at €5.8M under courses B and C. Each of these three assumptions is qualified; none is established.
Should the largest customer withdraw during the interval, course B is worth €3.3M to €4.4M rather than €17.7M to €19.9M. The spread between the best and the worst outcome of course B is of the order of €15M, and it hangs on a single fact we were unable to establish.
That is why this dossier does not recommend B; it is also why it does not recommend A.
The twelve daysthe execution table, D+1 to D+12, with the case of a refusal
Contractual grounds, an undertaking to give a definitive answer by 19 May, confirmation that exclusivity is maintained.
What you ask of the largest customer — a multi-year volume commitment — and what you offer in return — reserved capacity on the extended plant, which has value for that customer if its own market grows. This is an ordinary commercial act; it signals nothing.
Framing of the five players identified, no approach.
Without it, courses B, C and D2 all three rest on an undocumented assumption.
The trade-off then becomes personal rather than economic: the discount against the uncertainty. That case is investigated in § 05.
The exhibitsP1 to P10 — what each one establishes, and what it does not
Each entry states what it establishes, the mechanism when a figure comes from a calculation, and what it does not establish.
| Exhibit | What it establishes | What it does not establish |
|---|---|---|
| P1 Accounts receivable ledger (2023 to 2025) | The breakdown of revenue by customer and its stability. | Profitability by customer: the management accounts do not go down to that level — worth noting whichever course is chosen. |
| P2 Framework agreement of 14 April 2021 (and its two amendments) | The renewal regime, the notice period, the absence of any volume commitment, the existence of the April annual review. | Any intention whatsoever. |
| P3 Letter of intent (10 February) | The price, the size of the stake, the primary / secondary split, the principles of the shareholders' agreement. | The governance and liquidity clauses, left to the definitive documentation — course A is therefore not fully investigated until they are known. |
| P4 Plant extension quotation (8 January) | The amount and the lead time. | Ninety days' validity: the quotation expires on 8 April — before the 19 May response deadline; its revalidation should be requested now. |
| P5 Business plan of 28 February (and its adjusted version) | One possible trajectory. | Its probability. |
| P6 Nine comparable transactions (2021-2025) | A gap between two populations. Mechanism: enterprise value ÷ EBITDA of the financial year preceding the transaction; four public multiples, five estimated; segmentation by the share of the largest customer above and below 30%. | A multiple applicable to your company. |
| P7 Five upstream players (identification sheet only) | Their existence, their scope, their ownership. | Any appetite: no approach has been made, and none will be made without your instruction. |
| P8-P10 2025 production records · finance-lease schedules · filed accounts 2022-2024 | The saturation of the plant, the debt structure, the financial position. | — |
What returned nothingthree searches came back empty
Three searches came back empty, and that is part of the dossier. Your largest customer's filed accounts do not allow the product line that concerns you to be isolated, the sector detail not being published. The search for public communications by that same customer on its sourcing strategy is negative over five years. And two of the eleven comparable transactions initially retained were set aside for want of a multiple that could be reconstructed defensibly — they do not appear in the sample in § 03, and the gap stated therefore rests on nine transactions and not on eleven.
A search conducted without result is information. Omitting it would suggest it had not been made.
What we guaranteeand what this dossier is not
This dossier investigates your decision; you take it. That is the contractual object of the engagement, and it is put thus: We investigate the decision; you take it.
The red line, contractual: the machine never assesses a person · no decision is automated · the process is consented to and its findings returned · every conclusion is signed
Every conclusion is carried and signed by a person, by name — none is produced by an automatic chain. No decision is automated: this dossier expresses no recommendation among the four courses; it states what each one costs and what would have to be true for it to be the right one. The engagement bears on no person: none of your people has been assessed, no evaluation interview has been conducted, no instrument of individual measurement has been used — the object of the engagement is a decision of capital, and the contractual scope excludes that explicitly. Every statement carries its regime, and what is not established appears in § 07 without being filled in. Your documents were processed through professional services bound by an agreement excluding the use of content for the training of models, and they are returned or deleted under article 8 of the engagement letter.
What this dossier is not. It constitutes neither legal advice, nor tax advice, nor an investment recommendation within the meaning of financial regulation. Three points call for the opinion of your qualified advisers before any decision: the drafting of the governance and liquidity clauses of the shareholders' agreement; the tax treatment of the contribution-and-sale rollover under scenario D2; and the compliance of the holding-company structure with the undertakings in your existing bank agreements.
How this dossier was producedten days, three links
The grid is in the first drawer. What remains is what fed it, and what settled it. Ten days, three links.
One — the investigation. Your documents first, because that is where the findings that decide are to be found: the accounts receivable ledger over three financial years, the framework agreement and its amendments, the draft shareholders' agreement, finance-lease schedules, monthly production records, the business plan. Then the outside: nine comparable transactions reconstructed from registry filings, press releases and the trade press; five upstream players identified by cross-checking trade directories, trademark filings and sector publications; the regulatory framework applicable to the ranges concerned. Eleven sources and registers were interrogated; three returned nothing, and that is written in the drawer “What returned nothing”.
This link is the least visible part of a dossier and it is the one that decides what gets found. The finding in § 04 — €3.0M enters, €7.98M leaves, the programme costs 4.2 — owes nothing to subtlety of analysis: it comes from having read the letter of intent and the extension quotation with the same attention, and from having costed your need before looking at the offer. That is what no one had done, not out of negligence, but because each of your advisers was reading one of the two documents.
Two — the matrix. Described in the first drawer, applied in § 01 to 07. It is built for this type of question and for no other: a grid is derived from what actually decides the outcome, and is tested on known cases before being applied to a new one.
Three — the judgment. The reversal in § 04 — the variable is the order of operations, the price follows — and the first move in § 06 are judgments. No calculation produces them. They are dated, they are contestable, and they are signed.
The name of the thing. In the game of Go, the tesuji is the skilful move — the one played at the point that decides the game, often far from where attention is drawn. It is the name we give to the last link: the reading locates, the move is played there, and someone signs it.
The four courses, in fullthe amounts, the mechanisms, the cumulative conditions
Accept, on the terms of the letter
€7.98M of immediate personal liquidity, taking your wealth outside the company from €1.4M to €9.4M and lifting the concentration of your personal assets at fifty-four. A partner with means, with a network, and with the habit of value-creation plans.
You sell 45% at the multiple of an untreated risk — that is, if the estimate of the discount holds, between €4.7M and €7.8M of enterprise value left on the table qualified. You enter a shareholders' agreement at the moment your need to invest is greatest and your bargaining power least. And you enter a plan underfunded by €1.2M, which will resolve either through additional debt or through a downward adjustment to the programme — an adjustment that, either way, will no longer be yours alone.
Three cumulative conditions. That the diversification programme be written into the value-creation plan of the shareholders' agreement, with its budget and its calendar — rather than left to an annual arbitration. That the €1.2M balance be settled now in its principle and in its source, before signature. And that you have made the personal choice to bear the discount rather than the risk of the interval — which is perfectly defensible, provided it is done knowingly.
Defer by eighteen months, after diversification
You open on a cleaned-up base. If the programme delivers what your business plan projects — EBITDA at €4.0M, largest customer brought below 25% — the same sale of 45% is then worth between €14.5M and €16.3M against €10.98M today qualified. A difference of €3.5M to €5.3M in your pocket, eighteen months out.
Funding the interval, to be found without the round: your banks would follow for an additional €4.4M, taking borrowings to 2.5 times EBITDA qualified — a verbal, non-binding indication given on 6 March. Servicing that debt weighs on cash while the programme runs, that is, at the least comfortable moment. And you spend eighteen further months with 91% of your wealth in a single asset.
One condition, and it is a heavy one: that the largest customer stay through the interval. Should that customer leave in the twelfth month, EBITDA falls back to around €1.2M, equity value to around €6.2M — 8.0 × €1.2M − €3.4M of net debt —, and this course will have cost most of what course A guaranteed qualified. That condition cannot be appraised as things stand: it is the named void of § 07.
Do not open the capital
Complete freedom over the tempo. The programme is funded by bank debt and internally generated cash, on a slower rhythm — twenty-eight to thirty-four months rather than eighteen, depending on how much cash comes up from the company.
A ceiling on ambition, accepted, and above all the persistence of concentration in your personal wealth. At fifty-four, with 91% of your wealth in an illiquid asset a third of whose flow rests on a contract with no volume commitment, the status quo is itself a risk position — it simply bears a name no one pronounces.
That the ceiling be an explicit choice of life — you want to run this company at your own pace and hand it on or sell later — rather than a deferred decision in disguise. This is the one course of the four where the principal risk is psychological rather than economic: it is rarely chosen, and often merely endured.
Separate what you are looking for from who can bring it to you
the one that is not in the letter
What you lack is not capital first of all, it is access to new customers. An upstream player — a formulator, a supplier of active ingredients — or a selective distributor brings exactly that resource, and often part of the capital with it. Five players matching this profile have been identified across France and Italy.
What it costs: a search of four to eight months, a negotiation more complex than with a financial buyer, and a risk of fresh dependence to be bounded contractually from the outset. What would have to be true: that at least one of these five players have a documented strategic interest in securing contract-manufacturing capacity — which can be verified in three weeks and has not been investigated, the exclusivity in force forbidding it.
You buy back part of your shares through an acquisition vehicle funded by acquisition debt. You obtain personal liquidity — of the order of €6M to €7M depending on the debt capacity retained — while keeping control of the tempo, and you open the capital in twenty-four months on a diversified base.
What it costs: the holding company's debt service, of the order of €0.75M a year, taken from the dividends flowed up — that is, from the cash that would otherwise fund the programme. You cannot take the liquidity and fund the diversification with the same euro; the trade-off is head-on and it has to be posed as such. What would have to be true: that personal liquidity be your first need, and that the programme make do with an intermediate rhythm.
Book 30 minutes on a real situation
A framing conversation, never a production. You describe a decision you actually have to take; we tell you what an investigation would bring to light, and what it would leave untouched.
Book 30 minutesThe other door — Investors: the assessment of a leadership team →
A situation type. Facts in this dossier stated as at 11 March.
What is not established is not asserted.