Several media outlets report a joint, non-binding offer from Orange, Bouygues Telecom and Free-Iliad to take over most of Altice France/SFR, valued at €17 billion. Beyond the “deal story”, this type of operation recalls an obvious point often glossed over by slide decks: financial leverage can accelerate… or weaken.
When the mechanics jam, EBITDA flows straight to debt repayment, and investment (capex, digital, product) becomes the adjustment variable.
What recent history has taught us (same examples as in the post)
- Casino / Rallye: chain restructurings, forced disposals, dilution; debt ends up dictating the pace of decisions.
- Vivarte (La Halle, André…): two major restructurings to wipe out a debt that had become unmanageable; a textbook “lender-led” case.
- Camaïeu: takeovers, debt… then liquidation in 2022 (thousands of jobs affected).
- Outside France – Toys“R”Us: massive LBO; squeezed capex, missed digital turn → bankruptcy/closures.
- Outside France – Debenhams: repeated administration then liquidation; the brand survives, not the network.
Simple message: yes, there are too many deals that end badly. The point is not to blame the LBO. A good deal is first and foremost a good industrial project; leverage comes afterwards.
Why does it often fail?
- Debt dictates priorities: EBITDA serves the debt; capex falls back (maintenance, modernization, digital).
- Cycles & rates: a rate increase or a drop in EBITDA is enough to upset the balance (ratios, covenants).
- Maturity wall: the debt matures before operational value has had time to emerge.
- Governance & alignment: disconnected acquirers, greedy sellers… people optimize the Excel sheet rather than the business.
Vital reminder: money must serve the company, not the other way around.
Weak signals to spot early
- Capex “slipping” from quarter to quarter.
- DSO getting longer, credit notes rising.
- IT/e-commerce projects “postponed for lack of budget”.
- Promotions eating into margin to hold volume.
- Recurring “refi” meetings with no executable plan.
How to raise funds without being squeezed (operational, simple, actionable)
- Test the worst case: imagine +5% interest rates and –20% earnings. If cash holds and covenants remain manageable, the plan has room to breathe.
- Protect vital investment: maintenance, digital tools, product — don't cut.
- Monitor cash closely: every month → customer/supplier terms, inventory, collections.
- Plan the emergency exit: from day one, know what to sell, how to refinance, who decides.
Where Auguria helps in practice
We often implement Odoo following company acquisitions, and we have already seen failures.
Odoo makes it possible to run the company after the acquisition, but does not correct strategic mistakes. Our role: bring visibility and execution discipline to give the strategy a chance.
We help our customers set up clear, shared dashboards (cash & working capital, capex, margins, covenants) to align finance and business teams, and to decide fast and well.
In short
- Debt can help, but never replaces strategy.
- A good deal is first a good industrial project; leverage comes afterwards.
- In an acquisition/resale context, equipping quickly on Odoo makes the difference — without promising to fix a shaky strategy.