Akerys S.A.

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Akerys S.A.

5 Esplanade Compans-Caffarelli
Batiment B, BP 57
Toulouse, F-31902 Cedex 09
France
Telephone: (33 05 61) 12 12 12
Fax: (33 05 67) 31 73 18
Web site: http://www.akerys.com

Private Company
Incorporated: 2005
Employees: 1,992
Sales: EUR 789.7 million ($905.3 million) (2006 est.)
NAIC: 531210 Offices of Real Estate Agents and Brokers; 531110 Lessors of Residential Buildings and Dwellings; 531120 Lessors of Nonresidential Buildings (Except Miniwarehouses)

Akerys S.A. is one of France's leading residential real estate groups, with an emphasis on real estate investment services. The company operates in five primary areas through its five major divisions: Akerys Promotion, Akerys Location, Akerys Gestion, Akerys Immobilier, and Akerys Capital. Akerys Promotion, which oversees the group's residential real estate development operations, is the company's largest area of operations, accounting for more than 75 percent of the group's annual revenues. Through this division, Akerys is one of the most active residential lodging builders in France, delivering nearly 6,000 residential units in 2006.

Based in Toulouse, Akerys has established national operations, with more than 75 percent of the company's development projects located outside of the Paris region. While the company's Promotion division remains the historic core of its operations, Akerys is also one of France's most fully integrated real estate groups, particularly through its three services subsidiaries. Akerys Location handles the company's rental operations, operating a chain of 15 agencies throughout France. With a portfolio of more than 15,000 rentals per year, the company ranks among the leading French rental agencies. Akerys Gestion provides rental management services for individual and group property owners, while Akerys Immobilier provides traditional real estate services. The company also operates telemarketing and other commercialization subsidiaries, while Akerys Capital provides asset management and other real estate-based financial services.

Akerys is a privately held company controlled by the Qualis investment group. Through its subsidiaries DUOW et Korreden, Qualis holds more than 87 percent of Akerys' capital; the company's directors, management, and commercial partners share the remaining 13 percent. Akerys is led by president François Jouven. In 2006, the company posted revenues of EUR 790 million ($905 million).

TAX ADVANTAGE ORIGINS IN 1986

Akerys stemmed from the efforts of the French government to encourage real estate investment in the 1980s and 1990s. A major feature of the government's policies was a series of new laws in order to "defiscalize" or subsidize the purchase of real estate for investment purposes by offering an increasingly attractive series of tax breaks and advantages. By the early 1990s, several Toulouse-based real estate developers had recognized that the new legislation also opened up opportunities for the creation of companies specialized in the fast-emerging market for the construction of residential properties specifically built to take advantage of the new investment laws. Among them was the group 4M Promotion, formed in 1986 by Marcel Lignon, Christian Melet, and Jean-Luc Macaud.

Part of the focus of the new legislation was to encourage the private sector to build new residential rental properties in order to help fill the perennial national deficit in new housing. These laws made the development of housing created specifically for the rental market a highly attractive investment vehicle, both for real estate companies and for individuals. While 4M Promotion also operated as a traditional real estate developer, its operations increasingly focused on this new investment market at the start of the 1990s. In 1990, the company added a new commercial subsidiary, VIF, which focused on providing rental services for the group's residential developments. Because much of its residential units were sold to customers seeking real estate only as an investment, 4M's new subsidiary relieved purchasers of its apartments of the burden of having to locate renters for their investments. The company's operations also extended to the provision of maintenance and other services for the properties it developed. By 1991, 4M made the decision to specialize its operations wholly on the so-called defiscalization market.

Joining the company in 1992 was Maxime Basaïa, who became an important part of the 4M sales team. Basaïa left 4M in 1994 to found his own company, Ingénerie Financière Business (IFB), created specifically as a financial investment agency concentrated on the "defiscalization" market. From the start, IFB remained closely linked to 4M. Indeed, IFB initially focused its sales operations entirely on 4M's real estate developments. Yet demand for IFB's services quickly outstripped 4M's ability to supply it with new residential developments. By the end of the 1990s, IFB had begun working with other real estate promoters. Beginning in 1997, Basaïa also extended the company's range of services, developing a series of financial investment and insurance products and services, while also developing its own range of auxiliary operations, including property management and rental services.

Nonetheless, the two companies maintained a close working relationship. In the meantime, 4M continued to build up both its real estate development operations and its range of management, rental, and other services. By 1995, the company had decided to separate these two parts of its business into two distinct companies, creating Actif+ for its real estate development business, and Cap Gestion for its services wing. The company then expanded Cap Gestion through the acquisition of a number of property management agencies, including Logi Soleil, Gespi, and Jean-Jaurès.

JOINING FORCES IN 2000

Through the end of the 1990s and into the new century, Actif+ remained the principal supplier for IFB's fast-growing sales operations. Cap Gestion in the meantime had expanded its own range of services. In 1996, the company formed IFPI in support of developing its sales channels on a national level. That year, also, the company founded Exell Sécurité, dedicated to providing onsite security services for the group's construction projects. Then, in 1998, the company founded a telemarketing subsidiary, Télécontact, which proved highly effective in generating meetings with prospective clients.

In order to boost its real estate operations, Actif+'s founding members and management turned to outside capital for the first time in 2000. In that year, the group formed a new holding company, Financière Gratte-Ciel, as a vehicle for a leveraged buyout (LBO). This LBO was backed by Natexis Industrie and Deutsche Bank, which then became the company's majority shareholders. The LBO also marked a new step in the bringing together of Actif+, Cap Gestion, and IFB, when Maxime Basaïa was named as chairman of the Gratte-Ciel board of directors.

COMPANY PERSPECTIVES

Akerys represents our dual ambition: become the preferred intermediary for families in terms of housing and offer services adapted to the real estate concerns of our clients; meet, alongside elected officials and government agencies, the major challenges facing our society in the realm of lodging and quality of life. Thanks to our experience, the quality of our collaborators, and the support of our shareholders, our group presents all of the qualities of professionalism and reactivity required by a highly evolving market.

With its new capital backing, Gratte-Ciel quickly achieved its objective of achieving national coverage. By the end of 2001, the company had expanded its range of operations and agencies to include 57 départements within 18 of France's regions.

Gratte Ciel next began developing new markets for its main Actif+ division, which continued to account for 90 percent and more of its operations. In 2002, the company launched a new subsidiary, Prestigium, which focused on developing real estate and services for the high-end sector. Another subsidiary created that year was Finaxis, which sought to develop residential properties in partnership with other real estate promoters. The year 2002 also marked Actif+'s entry into the relatively new and fast-growing market for gated and residential communities, which provided not only residential units but also a range of services as well.

BECOMING AKERYS IN 2005

The year 2002 brought about a new step in the creation of the future Akerys. In that year, Maxime Basaïa quietly sold approximately 50 percent of IFB to Financière Gratte-Ciel. In this way, the companies approached their future merger while maintaining a separation between the capital of IFB on one side and Actif+ and Cap Gestion on the other. By 2004, however, the merger process took another, more decisive step, with Basaïa transferring full control of IFB to Gratte-Ciel. As part of this capital restructuring effort, a new financial investor was brought in, in the form of investment group Qualis. This allowed Natexis and Deutsche Bank, as well as the original 4M founders, to exit the group's capital. Qualis initially took control of nearly 64 percent of Gratte-Ciel's capital, while Basaïa became head of the group; in this way, Basaïa had managed to bring IFB full circle, completing its own operations with the addition of Actif+'s real estate development operations.

Following this operation, the merger among IFB, Actif+, and Cap Gestion was formalized, when the company reorganized under a new name, Akerys, in 2005. Over the next year and a half, Akerys launched a restructuring effort, reducing the number of its subsidiaries from 28 companies to just 12. This process permitted the company to develop a new organizational structure grouped around five major divisional subsidiaries: Akerys Promotion, which took over the group's real estate development operations; Akerys Location, which inherited its rental services business; the real estate management services arm Akerys Gestion; the company financial services and asset management wing Akerys Capital; and the newly launched Akerys Immobilier. Created in 2005, the new subsidiary focused on providing traditional residential real estate services.

KEY DATES

1986:: Creation of real estate development group 4M Promotion in Toulouse, France.
1990:: 4M launches VIF rental services subsidiary.
1991:: The company focuses its operations on the "defiscalization" market.
1994:: Maxime Basaïa, who formerly worked for 4M, founds Ingénerie Financière Business (IFB), specializing in sales of 4M properties.
1995:: 4M splits operations into two new companies, Actif+ (real estate development) and Cap Gestion (sales and services).
2005:: The merger of IFB, Actif+, and Cap Gestion creates Akerys.
2006:: Akerys becomes number two French real estate group with revenues of EUR 790 million.

In 2006, Qualis boosted its stake in Akerys to more than 87 percent, with the remainder shared among the company's management, board of directors, and financial partners. In that year, the company named a new president, François Jouven. By then, Akerys had emerged as France's number two residential real estate developer, with total revenues nearing EUR 790 million.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

4 M SA; ACTIF + SA; Akerys Promotion SAS; Akerys Location SAS; Akerys Gestion SAS; Akerys Immobilier SAS; Akerys Capital SAS; Atelys SARL; Cap Gestion SA; Financière Gratte-Ciel SA; Groupe Gratte-Ciel SAS; I.F.B. Gestion; I.F.B. SA; M.D.B. SARL; Télécontact SARL.

PRINCIPAL COMPETITORS

Caisse Centrale du Credit Immobilier de France; Finatis; Louis Dreyfus S.A.S.; Compagnie Financiere Saint Honore S.A.; Bail Investissement; Fonciere des Murs S.C.A.; Genefim S.A.; Mercialys; Klepierre S.A.; BNP Paribas Immobilier S.A.S.; Foncia Groupe; Groupe Arcade.