(AOF) – Eurazeo has reached an agreement with Macquarie Asset Management, leader of a consortium comprising British Columbia Investment Management Corporation (BCI) and MEAG, for the sale of its 47% stake in Reden Solar, one of the main producers independent photovoltaic renewable energy companies based on an Enterprise Value of 2.5 billion euros.
Reden Solar is present in eight countries, with an operational capacity of over 750MW and a significant development pipeline.
This transaction would generate disposal proceeds of €632 million for Eurazeo, ie a cash-on-cash multiple of 4.3 and an internal rate of return (IRR) of around 42%.
“Since the acquisition of Reden Solar in 2017, Eurazeo’s Real Assets team has worked together with its co-investor InfraVia to support the group’s development, drawing on its long experience in this sector and its expertise in terms of structuring, managing and developing the platform through the combination of organic growth and external growth”, explained Eurazeo.
Alongside the Reden Solar management team that led this development, Eurazeo and Infravia have enabled the group to multiply its operating capacity by 8 and its Ebitda by more than 4 over the last 5 years.
Reden Solar has also expanded its presence across Southern Europe, strengthening its market positions.
Completion of this operation remains subject to the approval of the regulatory and competition authorities.
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Key points
– Global investment company created in 2001;
– 21.8 billion in diversified assets in a portfolio of more than 450 companies, including 15 billion on behalf of third parties: 73% in private equity, 21% in private debt, 14% in mandates and 6% in immovable ;
– Business model: 4 strengths: equity guaranteeing the group’s independence, a strong presence in 10 countries and 4 continents, strong and longstanding commitment to CSR / 2 priorities: to become the reference investment platform in Europe , each division being No. 1 in its market, and continuing the fundraising dynamic / 2 complementary challenges for sustainable growth: asset management for predictable and recurring income and investment in companies not exposed to cycles or with strong growth potential;
– Private equity with Eurazeo Capital: (companies valued at over €200m), SMEs (€50 to €200m), EuroBrands (brands with international potential, Eurazeo Growth (technology companies with a proven business model), China Acceleration, Venture (capital-innovation focused on digital), Private Debt (European SMEs and ETIs, etc.);
– Capital structured between JC Decaux holding (17.91%), the Michel David-Weill family (16.71%) and the Richardson family (3.55%), Michel David-Weill chairing the 15-member supervisory board and Virginie Morgon the Executive Board;
– Solid debt-free balance sheet with €5.1 billion in equity at the end of June 2021 and €1.1 billion in cash.
Challenges
– Medium-term growth strategy: doubling of assets under management, based on 4 sustainable growth axes, increase in asset management for predictable and recurring income, investments in companies not exposed to cycles or with high growth potential ;
– Innovation strategy led by a digital committee within the Supervisory Board in charge of accelerating the integration of digital into the Group’s operational activities, monitoring and analyzing the digital environment and assessing cyber risk;
– “O +“ environmental strategy aiming for net zero emissions by 2040 based on 3 commitments: positioning on the low carbon economy, integration of the cost of carbon in the performance measurement of the investment cycle, integration of the carbon variable in the entire investment cycle / 80% of active funds with a CSR investment policy / 20% of managed funds dedicated to the low-carbon economy;
– Portfolio rotation: €2.4 billion in disposals and €4.1 billion in investments at the end of September 2021;
– Balance of the portfolio, no company representing +10% of the NAV and the share of listed companies being limited to 4%.
Challenges
– Valuation linked to the financial markets and measured by the revalued net asset (€99.1 at the end of June 2021, historical level), to be compared with the stock market price;
– Reinforcement of positions in tech (1
er
investor in France and Europe) and in the “brands” activity for the deployment of strong brands; doubling of fundraising;
– At the end of September 2021, 44% growth in assets under management, driven by fundraising;
– 2022 expectations: dynamic fundraising, acceleration of asset disposals, growth in assets under management:
– 2020 dividend, of €1.5, and share buyback program.