October
2023
With the acquisition of IK Partners, Wendel initiates its development strategy in third-party asset management
Dear shareholders,
I know that you all pay close attention to Wendel's news, so you will no doubt have seen how dense and varied the last six months have been. During this time, we have presented our new strategic directions, moved forward with plans to develop a third-party asset management business, sold our stake in Constantia Flexibles, acquired Scalian, and strengthened our financial capabilities through the issue of bonds exchangeable for Bureau Veritas shares and the extension of our maturities. Wendel's teams have been extremely busy, and I would like to thank them warmly for using their considerable collective talent to advance the company's rapid development. Day after day, the roadmap I sketched out for you on March 16 is becoming a reality.
And today, Wendel is taking a major step forward in the implementation of its strategic ambitions by entering into exclusive negotiations with a view to acquiring IK Partners from its partners.
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IK Partners is one of Europe's most recognized PE firms, with teams across seven Northern European countries focusing on the mid-market segment. The company invests in the Business Services, Healthcare, Consumer and Industrials sectors in France, Benelux, Germany, Austria, Switzerland, Scandinavia and the UK. IK Partners manages nearly €12 billion of private assets on behalf of third-party investors and has invested in over 180 companies since its creation. The Company's Investment teams have an excellent track record, having collectively achieved an average gross annual Internal Rate of Return (IRR) of around 26% for the 116 operations completed since 2012.
Laurent Mignon, Group CEO
O C T O B E R 2 0 2 3
By 2024, IK Partners' activities are expected to generate around €150 million in management fees and around €60 million in pre-tax Fee Related Earnings (FRE). 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 value created by its teams.
For Wendel and its shareholders, this transaction has three main dimensions:
- our aim to rapidly strengthen Wendel's recurring income by adding the management fees received by IK Partners;
- a special focus on aligning our mutual interests in a lasting way, since the way the transaction is structured means that IK Partners' teams will be committed to working alongside Wendel over the long term;
- the first concrete expression of our ambition to build, by 2027, a platform managing multiple private asset classes, alongside our historical investment activity. We will therefore continue to provide lasting support to attractive companies driven by long-term trends, as an active shareholder with value creation as our compass.
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A greater dividend payout capacity
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, resulting in a greater dividend payout capacity for our shareholders. In addition, confident in the value-creating potential of our strategy, we have announced a €100 million share buyback program. These shares bought back on the market will be used to ''pay'' for our future acquisitions. So today we intend to seize the opportunity to buy back our shares at a significant discount, convinced that the success of our strategy will help both to increase the share price and reduce the discount.
Wendel's considerable potential is becoming clearer every day: our family heritage, solid balance sheet, strong investment capabilities, high-quality portfolio and talented teams will all stand us in good stead for the future.
Laurent Mignon,
Group CEO
Consult the press releasesetting out the transaction in more detail on our website.
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O C T O B E R 2 0 2 3
Wendel's strategic direction
Objectif d'investissement
Implement an active portfolio management and investment policy
Implementation
March 16
With the intention of investing c. €2bn of equity within 2 years
Equity investments | Geography | ||
of €300-600m | Western Europe and North America |
Strengthen our role as an active shareholder to create value in the portfolio
Investment in unlisted companies with priority given to majority holdings
Active involvement with the Bureau Veritas management team to accelerate value creation
Ambition to develop a third-party Asset Manager
Based on Wendel's investment platform and further investment in people, to create value
through our existing capabilities and raising third-party money
New financial policy
A dividend set at around 2% of Net Asset Value, on average,
while having a minimum objective of annual stability
The optimization of Wendel's financing capacity, while preserving an LTV ratio compatible
with an Investment Grade financial rating
Double-digit average return to shareholders
March 22
Exchangeable bond into Bureau Veritas shares: €750m raised to finance value creation roadmap
June 22
Laurent Mignon appointed Chairman of Bureau Veritas
July 31
Wendel signs an agreement for the sale of Constantia Flexibles (c. €1.1bn of proceeds expected, above NAV valuation)
Announcement of New
Strategic Orientations
April 17
Wendel has entered into exclusive negotiations with the intent to acquire the Scalian group
June 12-19
Successful liability management to further extend maturities
July 27
Closing of Scalian
(€557m of equity invested)
October 17
Wendel launches its expansion in third-party private asset management and enters into exclusive negotiations with IK Partners
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CONTACT US
Tél. : +33 (0)1 42 85 30 00
communication@wendelgroup.com
Individual shareholders
Wendel - Relations actionnaires individuels 4 rue Paul-Cézanne - 75008 Paris www.wendelgroup.com
Wendel @WendelGroup
Credits : Getty Images, Mathias Filippini
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Wendel SE published this content on 25 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2023 09:50:38 UTC.