Lazard, Incoming Linklaters Lawyer Work With Cerba’s Biologist Shareholders Ahead of Debt Talks

Financial advisory firm Lazard is working with a group of Cerba’s biologist shareholders ahead of debt talks set to kick off after the summer, sources told Octus. Francois Kopf, a partner who will join Linklaters’ restructuring team effective Aug. 1, is also assisting the group of biologist shareholders, the sources said.

French law governing the incorporation of clinical laboratories places biologist shareholders, who hold majority voting rights and have control of operational decisions, in a central role regarding the operations of Cerba’s lab business. For further details, see the section Laboratory Ownership and Corporate Structure below.

The biologist group is seeking to protect its interests in the group’s laboratory subsidiaries throughout a potential restructuring, the sources pointed out.

Rothschild and Gibson Dunn are advising Cerba, while Latham & Watkins is advising sponsor EQT. Eight Advisory is carrying out an independent business review for the company, with Boston Consulting Group advising the company on a performance turnaround plan, Octus previously reported.

On the lender side, PJT has been lined up to advise a group of primarily first lien lenders, representing around half of the company’s secured debt. The group consists of around 10 funds, including Sona, CVC, PGIM, Invesco, Anchorage and Alcentra, and its lawyers are Milbank and Willkie Farr, as reported.

More groups are expected to emerge, including one representing RCF lenders, sources said. The company’s RCF has been trading actively in the secondary market, with roughly €90 million of the €450 million facility already traded in high 60s to low 70s, and €9.5 million clearing in the high 60s yesterday, July 24, as reported.

Overall, around €500 million of the group’s senior secured debt has traded in recent weeks as concerns mount over the group’s deteriorating liquidity and unsustainable financial structure, which may lead to a potential restructuring of the debt.

Sponsor EQT has begun meeting lenders in Paris, l’Informé reported on July 17. Cerba and its shareholder have also approached the Paris Economic Court with the aim of initiating an amicable procedure, mandat ad hoc or conciliation, under the mediation of high-profile judicial administrator, Hélène Bourbouloux, the article said.

L’Informé also reported that the company is considering asking creditors to delay by six months an interest payment due in August.

As of the end of March, Cerba had drawn down another €50 million of the revolver bringing the total drawn amount to €366 million under the €450 million RCF, representing roughly 81% of the total amount.

Octus published an earnings analysis of Cerba HERE, a restructuring options analysis HERE and a liability management options analysis HERE.
 

Biologist shareholders play a critical role for Cerba, both from a legal and operational standpoint.

According to the OM dated June 9, 2021, Cerba’s French clinical laboratories are all incorporated as Selafa or SELAs, both of which are a form of SEL (société d’exercice libéral). Under French laws, SELs for medical professionals are subject to tight governance and ownership rules aimed at preserving the independence and ethical integrity of medical practitioners.
A key legal requirement is that more than 50% of voting rights in an SEL must be held, either directly or indirectly through an SPFPL (société de participations financières de professions libérales), by clinical pathologists working in the relevant laboratory. In addition, persons who are not clinical pathologists or entities that are not laboratory companies may not hold more than 25% of the share capital in a laboratory company.

Although Cerba does not hold a majority of the voting rights in these laboratory entities, it receives the majority of the economic benefits from their activities and is able to demonstrate control in accordance with IFRS 10, in full compliance with French legislation. As a result, these French entities are fully consolidated in Cerba’s financial statements.

Operationally, French law requires that each clinical laboratory must be supervised during business hours by at least one clinical pathologist, who serves as the legal representative of the laboratory and assumes full responsibility for its operations. Furthermore, each branch office must have at least one medical biologist available to meet its operational needs.

According to the OM, relating to the €420 million 3.5% senior secured notes due 2028 and the €325 million 5% senior unsecured notes due 2029, management collectively holds a 7% equity stake at the Topco level. It is unclear whether any biologists are included in this management shareholder group.

Dividends are distributed annually to the minority shareholders, amounting to approximately €7 million in both 2023 and 2024.

Cerba’s corporate structure is outlined below:
 

Source: OM pg.15

Cerba declined Octus’ request for a comment.

Cerba’s capital structure as of March 31, 2025, is below: