How quickly time passes. Just a few weeks ago, in the wake of the announced takeover by British group Admiral, French insurance company Loco advertised itself through billboards on the Paris metro and felt confident enough to poke fun at the fact that it had once won the “next unicorn” award. Fast forward to this week, and its parent company, Demain ES, is going up for sale via Legal notice in the newspaper After the admiral abandoned the ship.
What happened in the meantime was a bumpy ride from one show to the next, until the court put the brakes on a roller coaster ride that couldn’t end soon enough for the 120-plus employees whose jobs were on the line. They already know they are working for a non-unicorn company, but they are now likely very keen to find out if their next employer is Allianz.
As for policyholders, Luko insists there is no need to worry, said Luko Cover, the broker and manager of contracts marketed by Luko, and Luko Insurance AG, the insurance company of the Luko Group. [are] Separate entities […]. Luko’s insurance and brokerage activities continue to operate normally, the company said.
However, it will not be business as usual for Demain following the court decision that emerged this week. The startup’s parent company entered urgent preventive measures in June. But as a result of its insolvency, it will now be subject to judicial reorganization, which is a bad omen because this process often ends in liquidation.
Of course, it’s still possible to get Luko; Hence the upcoming notice in the newspaper. But despite the agreement the two companies struck in June this year, it will not be by Admiral: it has now been confirmed that the British insurance group backed out of the deal on October 20.
Admiral was to pay €14 million for Luko Cover – €11 million in full, plus an additional €3 million linked to specific milestones. This partly explains why the M&A process faltered: it sparked Loco 72 million euros During her individual journey, it is easy to see how difficult it was to accommodate the debtors. However, what we understand is that the main development was the Admiral’s withdrawal.
There may not have been a single reason why the Admiral surrendered, and the overall context may have played a role. But according to court proceedings, Admiral blamed a €2.3 million dispute that arose during due diligence over how premiums collected by Luko Cover on behalf of insurers were calculated, while the prospect of a VAT offset also raised eyebrows. TechCrunch reached out to Admiral and its French subsidiary L’Olivier for confirmation, but did not receive any response.
Regardless, Loco was surprisingly quick to find a replacement, court documents revealed. On November 8, it received a formal offer from Allianz for the same assets that Admiral was to acquire – but without any HR commitments.
While Allianz’s offer did not come with a guarantee of saving jobs at Demin and its subsidiaries, it made sense at a strategic level. In fact, the insurance incumbent is preparing for it launch The DTC insurtech platform in France is called Allianz Direct. Meanwhile, even Loco’s critics acknowledged that the company became a DTC home insurance icon in France before it expanded further.
As for the amount Allianz offered, that depends on who you ask; Demain made the offer for a total value of €14 million. The court disagreed and concluded that it was worth €8 million because the rest would cover the debt takeover. But of course, this is yesterday’s price, not tomorrow’s price.
Allianz’s offer for Demain may still stand even as the company undergoes judicial reorganization, but it would be surprising if the price remained unchanged. On the other hand, its surroundings may also change; Demain is less restrictive in its dealings now than when it had to search for a match for Admiral’s offer.
However, there are parts of Luko that are no longer for sale.
Earlier this year, German insurer Getsafe had already acquired the portfolio of mostly German clients that was a legacy of Luko’s acquisition of multi-product insurer Coya in 2022.
Additionally, while Luko entered into the business of securing unpaid rent with Acquisition of Uncle That same year, that wallet is now It was acquired by French broker Solly Azar In partnership with Sada Insurance Company. Both acquirers emphasized that these deals are closed and independent of Demain’s judicial proceedings.
However, Loco might be able to sell more than the Admiral was interested in buying. But we are more interested in knowing who will buy Demain; Would it be Allianz that offered Demain a daily advance of €25,000 to keep the company afloat? Or could it be one of the potential buyers whose names have been floated at some point, such as AXA, Ornikar or Leocare?
The worst case scenario is that all offers disappear. If that happens, some may wish the court would be more flexible in light of Allianz’s offer. Its latest decision came as a bit of a surprise to Luko, a source close to the matter told TechCrunch. But legally, it seemed inevitable; in French lawthe protections do not apply to insolvent companies, as is the case with Demain now.
Even if the court had some leeway, it probably would not be keen to set a precedent, especially at a time when bankruptcy-related actions are becoming more common. Earlier this month, French transportation startup Cityscoot announced itself bankrupt It was then installed In light of the judicial reorganization. Maybe he’ll come out on top, and Loco might as well; But knowing the odds, not all companies will be able to do this, even if they were once unicorns of the future.
Update: Admiral responded to TechCrunch on November 23 with the following statement: “Admiral intended to purchase Luko’s French home business. Unfortunately, they were unable to meet the conditions set out in the deal documents and the parties were unable to reach an agreement to enable this transaction to be completed.
It’s unclear whether Luko will publicly challenge that statement and the admiral’s decision, but a source close to the matter told TechCrunch on Wednesday that rather than litigate, Luko’s priority was to put an end to the proceedings, which have been difficult for its employees.
Since then, a Luko employee representative who also attended the hearing has clarified that Allianz’s offer involves merging the same number of employees that Admiral will have – about 130 employees; Our understanding is that the court’s comment that the potential buyer made no commitments on the part of HR therefore applies to what would have happened in the long term.