Wendel launches its expansion in third-party private asset
management and enters into exclusive negotiations with IK Partners
PRESS RELEASE - OCTOBER 17, 2023
Wendel launches its expansion in third-party
private asset management and enters into exclusive negotiations
with IK Partners
Six months after presenting its new strategic
orientations, Wendel announces today that it has entered into
exclusive negotiations with a view to acquiring a controlling stake
in IK Partners (“IK” or “the Company”) from its partners who would
also reinvest a portion of their proceeds in future IK funds as
part of the envisaged transaction. IK Partners is a leading
European private equity (“PE”) firm specializing in European
mid-market buy-outs. For Wendel, this transaction will constitute
the foundation its new third-party asset management business, which
is aimed at generating additional sources of recurring income and
intrinsic value creation.
Subject to consultation with the relevant works
council and satisfaction and finalization of negotiations as well
as the conditions for completion (including regulatory approvals),
the acquisition of a controlling stake in IK is expected to be
completed in the first half of 2024.
A European private equity
leader
Founded in 1989, IK is one of Europe's most
recognized PE firms, with teams across a number of Northern
European countries focusing on the mid-market segment. The Company
invests in the Business Services, Healthcare, Consumer and
Industrials sectors in Benelux, DACH, France, Nordics and the
UK.
IK manages 11.81 billion euros of private assets
on behalf of third-party investors and since inception, has
invested in over 180 companies.
IK supports high-potential companies, working
closely with management teams to build strong, well-positioned
businesses with outstanding long-term prospects. The Company’s
Investment teams have an excellent track record, having
collectively achieved an average gross IRR of around 26%2 with a
tradition of generating consistently strong DPI to its investors.
By 2024, IK Partners’ activities are expected to generate around
150 million euros in management fees and around 60 million euros in
pre-tax Fee Related Earnings (FRE).
A transaction aligning strategic
interests of all stakeholders, over the long-term
The proposed transaction is a strategic
partnership in which IK Partners’ teams — who remain committed for
the long term — will continue to operate autonomously in the same
markets and strategies, under the same brand. A key feature of the
envisaged partnership will be the commitment of significant capital
by Wendel to support IK’s present and future platform funds as well
as the development of new strategies. The envisaged transaction
would lead to the full acquisition of IK over time.
The transaction would encompass (i) an initial
transaction and (ii) subsequent transactions structured to ensure
alignment of interests of all stakeholders:
(i) Initial
transaction
As part of the initial transaction (expected to
be finalized in the first half of 2024), Wendel would invest
383 million euros, or 12.5 times the estimated 2024 pre-tax
Fee Related Earnings (“FRE”), to acquire 51% of IK Partners’ shares
and rights to 20% of the carried interest generated on all future
funds raised by IK Partners.
The 383 million euros would be paid by Wendel in
two stages:
- 255 million euros at the time of
closing,
- 128 million euros 3 years after
closing, subject to certain conditions.
(ii) Subsequent
transactions
The remaining 49% of IK Partners’ capital would
be acquired by Wendel in subsequent transactions, which would take
place between 2029 and 2032. These subsequent acquisitions of IK
Partners shares by Wendel would be payable in cash or in Wendel
shares, at Wendel's discretion. The price of these additional
transactions would depend on the growth of FRE over the period.
In addition, Wendel would participate in future
fundraising activities up to a maximum of 10% of the capital
raised, thus diversifying its investments in asset classes whose
past performance has regularly exceeded 20% IRR, thereby further
accelerating IK’s growth. IK Partners' team would remain autonomous
in its day-to-day management and its Investment Committee would
remain fully independent.
Wendel's development
objectives
Wendel's ambition is to build a sizeable
platform managing multiple private asset classes, alongside its
historical permanent capital investment activity. The development
of this platform will provide Wendel with recurring cashflows and
exposure to the performance of multiple asset classes. This
objective will be achieved both organically and through new
targeted acquisitions.
This evolution of Wendel's business model is
designed to enable the development, over time, of a value-creating
platform with the potential to generate operational synergies.
The third-party asset management platform will
be developed alongside the permanent capital strategy of Wendel,
with the objective to generate double-digit Total Shareholder
Return.
The present negotiations pertaining to the
acquisition of IK announced today are part of Wendel’s 2 billion
euros investment target over 24 months announced on March 16,
2023.
Launch of a €100 million share buyback
program
Wendel also announces today that it intends to
launch a 100 million euros share buyback program. The shares
repurchased under this program will be used to cover Wendel's
long-term incentive plans and to finance potential strategic
acquisitions paid with Wendel shares.
Laurent Mignon, Wendel Group CEO,
commented:
"We are very proud to embark on this new
entrepreneurial stage in Wendel's development with a high-quality
company like IK Partners, sharing the same values and investment
philosophy. Wendel and IK Partners are strongly committed to
creating value in their portfolio companies, with a strong focus on
establishing solid governance and supporting their operational and
external growth.
The acquisition of IK Partners will be a major
step in the deployment of the strategy we announced on March 16. It
will be the foundation of the private asset management division we
are building. Given its financial strength, Wendel will have the
resources to support IK Partners' development over the long term,
as well as to invest in its funds to gain access to the highly
value-creating strategies implemented by its teams.
Implementing this ambitious strategy will
accelerate Wendel's diversification, boost recurring cash flow
generation and enhance our attractiveness as an investor and as a
listed company. These first six months demonstrate our
determination to deploy Wendel's new strategy.
We look forward to working with Chris Masek, Dan
Soudry and their teams to ensure the success of this value-creating
partnership. I would like to thank the Wendel teams for their
contribution to this new milestone in our development. I am
convinced that in the years to come, we will find new opportunities
for external growth and direct investments that will create value
for Wendel's shareholders while preserving our company's strong
financial profile."
Christopher Masek, CEO of IK Partners,
commented:
"We are excited at the prospect of partnering
with Wendel, whose investment will support our existing strategies,
while also creating the opportunity for us to accelerate growth in
other areas. The envisaged partnership will allow our Company to
achieve its three strategic objectives which are to: access
significant permanent capital; secure a long-term solution for
our leadership team to grow; and maintain our autonomy
and identity.
In an industry that is seeing an increasing
number of alliances being formed, we believe that this transaction
sets the foundation for continued growth and strengthening of the
IK platform. It offers a unique and attractive model that benefits
our Company, employees and investor for years to come."
Agenda
Thursday October 26, 2023
Q3 2023 Trading
update – Publication of NAV as of September 30, 2023
(post-market release).
Tuesday December 12, 2023
2023 Investor Day
Wednesday February 28 , 2024
FY 2024 results – Publication
of NAV as of December 31, 2023, and Full-Year consolidated
financial statements (post-market release).
Thursday April 25th, 2024
Q1 2024 Trading
update – Publication of NAV as of March 31, 2024
(post-market release)
Thursday May 16th, 2024
Annual General Meeting
Wednesday July 31, 2024
H1 2024 results – Publication
of NAV as of June 30, 2024, and condensed Half-Year consolidated
financial statements (post-market release).
Thursday October 24, 2024
Q3 2024 Trading
update – Publication of NAV as of September 30, 2024
(post-market release).
Thursday December 5th, 2024
2024 Investor Day
About Wendel
Wendel is one of Europe’s leading listed
investment firms. The Group invests in Europe and
North America in companies which are
leaders in their field, such as ACAMS, Bureau
Veritas, Constantia Flexibles, Crisis Prevention Institute,
IHS Towers, Stahl and Tarkett. Wendel often plays an active role
as a controlling or significant shareholder in its
portfolio companies. Wendel seeks
to implement long-term development strategies, which
involve boosting growth and margins of companies so as
to enhance their leading market positions. With Wendel Growth
(formerly known as Wendel Lab), Wendel also invests via funds or
directly in innovative, high-growth companies.
Wendel is listed on Eurolist by Euronext
Paris.
Standard & Poor’s ratings: Long-term: BBB,
stable outlook – Short-term: A-2 since January 25, 2019
Moody’s ratings: Long-term: Baa2, stable outlook
since September 5, 2018
Wendel is the Founding Sponsor of Centre
Pompidou-Metz. In recognition of its long-term patronage of the
arts, Wendel received the distinction of ‘Grand Mécène de la
Culture’ in 2012.
For more information: wendelgroup.com
Follow us on LinkedIn
@Wendel
Press
contacts |
Analyst and investor contacts |
Christine
Anglade: + 33 1 42 85 63
24 |
Olivier Allot: +33 1 42 85 63 73 |
c.anglade@wendelgroup.com |
o.allot@wendelgroup.com |
|
|
Caroline Decaux:
+33 1 42 85 91
27 |
Lucile Roch: +33 1 42 85 63 72 |
c.decaux@wendelgroup.com |
l.roch@wendelgroup.com |
|
|
Primatice |
|
Olivier Labesse:
+33 6 79 11 49 71 |
|
olivierlabesse@primatice.com |
|
Hugues Schmitt:
+33 6 71 99 74 58 |
|
huguesschmitt@primatice.com |
|
|
|
Kekst CNC |
|
Todd Fogarty: +1
212 521 4854 |
|
todd.fogarty@kekstcnc.com |
1 Including co-invest direct investments from
significant LPs, and from third-party co-control co-investment.
2 Across fully exited companies in the IK VII
and IK VIII funds.
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