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Interview with Yoann Melloul, In Extenso Finance and Transmission

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Before the crisis, at In Extenso, the business was doing very well. There was a string of deals and favourable mergers and acquisitions. Their number was increasing and so was their valuation. On the other hand, the crisis has posed serious difficulties for the continuation of activities.

The operations already well advanced, the advanced negotiations, were able to continue on the whole but were forced to not be able to conclude during the confinement because of the physical unavailability of the interlocutors. However, these operations were carried out at the end of the confinement and until the end of July. There has been a whole period of catching up. On the other hand, other files at a less advanced stage have been put on stand-by to avoid risks to the files. We have seen a 3rd case scenario for the most impacted sectors. In Extenso Finance & Transmission then intervened more to support the leaders. Identify risks and threats, make the right operational decisions (production, marketing, marketing, etc.), prevent risks, etc.). This period has been and still is also an opportunity to reassess business plans and business models.

Yoann MELLOUL, Director Of the Region In Extenso Division

Supporting leaders towards recovery

In Extenso has also multiplied its support for buyers. An appreciable effect of the lockdown, they had more time than before. In addition, new opportunities have emerged in view of the period.

In Extenso continues to support managers and prospects for the recovery. Reversal of business model and risk prevention are at the heart of the discussions to allow companies to pass the course. To provide the right advice to everyone, the firm has partnered with consulting firms. This is all the more important as the reflection times are slightly extended but during this time it is necessary to continue to work upstream to prepare the operations.

It is not easy to say at this time what will remain of the measures put in place by companies during this period or whether there will have been beneficial effects. The moment of truth is going to be in the coming weeks and months. In any case, it is necessary to remain vigilant for the end of 2020 and the beginning of 2021 because this is where companies will feel the backlash of the crisis.

Between uncertainties and the thirst to move forward, the time has come for change for companies.

Processes and working methods, the time for sustainable change

Regarding working methods and changes in processes within companies, on the other hand, we can easily distinguish two phases. The first was to alleviate the urgency generated by the lockdown. During this period, companies mainly needed support for the implementation of EMPs. It was necessary to find immediate solutions to pass the course and strengthen the cash flow of companies.

Then, at the end of the confinement, there was a growing interest in a reflection on a reconstruction of the company on a horizon in the short, medium and long term. It was then necessary to establish external growth strategies, for example.

Yet, traditionally, questioning is not easy, especially when the company is the baby of its leader. Historically, questioning the economic model is complicated. More recently, and even before Covid, this way of thinking has begun to evolve in the sense that the transmission market has shown its virtues. External growth operations have shown that they allow for value creation. Naturally, an external growth operation requires you to ask yourself the right questions about the business model. Business leaders are therefore more able to question and revise it.

Accelerated digitalization in the face of confinement

Beyond all these forced changes, more or less well lived, the confinement was also the occasion of a good surprise. Indeed, digital has quickly been set up. In the end, there was no particular difficulty both on communication and on sales. Companies quickly turned to their customers for solutions. For companies providing business services, IT, transport, logistics, telecom, there were overall no worries. On the other hand, it is true that depending on the sector (construction, metallurgy), there are some for which the transposition into digital was more complicated.

As far as In Extenso is concerned, the agents were well helped by the group’s IT tools that existed beforehand. Digital is a major challenge for the profession so the group chose to take the turn several years ago.

Of course, the same protective reflexes have been observed in most companies. One of the first was the hiring freeze to get a clearer picture. It was also a good time to review the organization of work. Beyond teleworking, it was often necessary to re-establish more matrix organizations and reallocate resources to the positions that needed them. Achieving this was a great proof of flexibility.

A crisis with heavy economic repercussions

The Covid-19 crisis is having a heavy impact in all regions in the same way, although they vary from one sector to another. For example, the industrial cleaning sector is doing very well at the moment. With the new hygiene standards and new health regulations, these companies are in great demand. Secondly, there are also differences between the regions according to their own flagship sectors, the poles of excellence. In the Bordeaux region, the wine sector is suffering a little but sales are picking up more internationally. Exports continue to remain at a good level and have restarted well. For aeronautics, on the other hand, it is more complicated.

At present, the situation is mixed. At In Extenso, we expected a faster recovery. It is finally more progressive than expected, in line with the will of the State to proceed in stages.

Yoann Melloul, Regional Director, In Extenso Finance and Transmission

About:

Historically, the In Extenso Group practices in accounting. It employs more than 5,000 people spread over 280 locations. In Extenso Finance & Transmission is the subsidiary dedicated to mergers and acquisitions. Also present throughout France, it has 12 locations, including Bordeaux and Toulouse, and manages between 60 and 80 operations per year. More than 50% of the activity concerns disposals. The rest is divided into acquisition and fundraising missions.

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