Solving Efeso International and Argos Wityu conclude an investment agreement
Paris – On 11 June 2010, Solving Efeso concluded a critical agreement with the Argos Wityu investment fund, which will enable it to impart renewed momentum to its growth strategy and strengthen its financial position. This agreement includes the refinancing of its Oceane bond issue, due to mature in January 2012. Argos Wityu’s investment in Solving Efeso’s capital will result in a total cash injection of € 20 million, which will dramatically reduce the Company’s financial debt and provide it with the necessary resources for renewed strong growth, both organically and through acquisitions. According to the terms and conditions of the agreement, the following three stages have been planned:
- The day after the General Meeting of 29 June 2010, a holding company, of which Argos Wityu will be the majority shareholder, will subscribe to a reserved share capital increase of € 7.5 million, at a price of € 1.40 per share, resulting in this company holding 39.9% of the share capital of Solving Efeso and thus exceeding the threshold of 1/3 of the share capital and voting rights
- An obligatory takeover bid for the shares and Oceane bonds of Solving Efeso will then be launched by this new organisation, in accordance with French stock exchange regulations, at a price of € 1.70 per share and € 10.43 per Oceane, subject to compliance review by the AMF.
- An independent expert, the Bellot Mullenbach & Associés practice, has been commissioned by Solving Efeso to issue a fairness opinion on the transaction as a whole, it being specified that immediately after the takeover bid, the holding company will receive, through a transfer in kind, the majority of Solving Efeso shares held by members of the Management Board and managers.
- At the same time, the latter will also contribute about € 3 million in cash to a capital increase of the holding company, which will nonetheless remain under Argos Wityu’s control.
- These contributions in kind and in cash will be based on a Solving Efeso share price of between € 1.40 and € 1.55. In addition, Roland Fitoussi committed to sell between half and all his shares to Argos Wityu at a price of € 1.70 per share.
- After completion of the takeover bid, i.e. in all likelihood by the end of August, Oceane bonds will fall due as a result of the change of control over Solving Efeso and a second share capital increase of € 12.5 million, benefiting from a performance guarantee from the holding company, will then be carried out at a price of € 1.40 per share, with maintained shareholders’ pre-emption right, in order to provide Solving Efeso with the necessary funds for the redemption of Oceane bonds in early October, at a price of € 10.46 each (the redemption price is established in accordance with the securities note relating to the issue of Oceane bonds, approved on 12 October 2006).
After completion of these transactions, the Management Board will be maintained in its current composition and Roland Fitoussi will remain Chairman of the Supervisory Board. However, the composition of the Supervisory Board will be altered so that the majority of its members are appointed by Argos Wityu (4 out of 7 members). The resolutions pertaining to the above-mentioned capital increases will be submitted for approval to the Combined General Meeting of 29 June 2010, it being specified that a prospectus having received approval from the AMF will be made available to shareholders next week, the takeover bid will be preceded by a securities note approved by the AMF and a supplementary note, also approved by the AMF, will subsequently be prepared for the capital increase with pre-emption right.
Filippo Mantegazza, Chairman of the Management Board of Solving Efeso, stated: “Argos Wityu’s investment in Solving Efeso is a major step for our company. Bolstered by its expertise in strategic consulting and operational performance improvement, its loyal client base and its international exposure, Solving Efeso will now be in a position to resume its expansion in a more secure environment, since the constraint of the redemption of Oceane bonds by end 2011 has been raised. All the operational executives of the Group and I have found in Argos Wityu a partner that meets our expectations in terms of entrepreneurial approach, knowledge of our activities and capacity to support our growth strategy. We are pleased to welcome this new partner by our side and to commit with it to a profitable and sustained growth process.”
Louis Godron, Chief Executive Officer of Argos Wityu France, stated: “As clients of Solving Efeso, we have had the opportunity to discover its unique methodology and the superiority of its approach. As investors, we consider that these strong differentiating factors bode well for the future. By freeing the company from the strain of its financial burden, we are convinced we are providing it with the resources it needs to vigorously bounce back. When we were drawing up this transaction with management, which we mean to be amicable, we paid particular attention to giving existing shareholders the option to retain their shares (no compulsory buyback planned), dispose of them (takeover bid) or participate by our side in the Company’s development (through the € 12.5 million capital increase).”
Shareholders’ agenda: Combined General Meeting: 29 June 2010 2nd quarter 2010 sales: 29 July 2010
Contact Argos Wityu:
Press relations: Céline Lanoux Tel: +33 (0)1 53 67 20 50
SOLVING EFESO INTERNATIONAL is a global leader in corporate strategy and operational performance improvement consulting. The Solving International Group generates revenue in excess of € 50 million and employs a workforce of more than 350 consultants. It is established in 18 countries (Europe, Middle East and Americas). Solving Efeso shares trade on Compartment C of the Euronext Paris Stock Exchange.
|Float: 47% Shares outstanding: 8,069,269 ISIN: FR0004500106 Ticker: OLV||Date of IPO: 2 July 1998 Code 6467 Bloomberg: OLV: FP Reuters: SLVG.PA|
About ARGOS WITYU
Created in 1989, Argos Wityu is an independent European Private Equity firm with offices in Paris, Geneva and Milan. Argos Wityu focuses on takeover transactions (MBO, MBI, BIMBO, spin-off, reorganisation and build up) in medium sized companies with revenues of € 20 million to € 400 million.
The funds managed by Argos Wityu take majority stakes ranging from € 10 million to € 50 million. Argos Wityu develops an original investment strategy focusing on takeover transactions that require financial shareholders to be particularly involved at the management’s side and whose value creation strategy favours growth over leverage. The operations Argos Wityu has carried out include Buffet Crampon, Roc-Eclerc, Oxbow, Du Pareil au Même, Kermel and Eau Ecarlate in France, Bellco and TermoIndustriale in Italy and Maillefer and ORS in Switzerland.
The € 275 million Argos Wityu V fund raised in 2006 has allowed the firm to carry out 14 transactions to date: eight MBOs (Driver/Sitour, GPP, FHB, Kägi, Orsyp, LEXSI, Misapor and TermoIndustriale), four BIMBOs (Axyntis, Marie Laure PLV, Alkan and Bellco) and two MBIs (Dinno Santé and Mertz). Three of these have been sold to date: GPP, Dinno Santé and Kägi.