(News Bulletin 247) – The family of the founder, the management of the digital services company and the funds managed by Blackstone have decided to form a concert and launch a public purchase offer at a price of 70 euros per share. A difficult proposition for minorities to refuse, according to Stifel.

Is a large-scale “midcap” preparing to bid farewell to the Paris Stock Exchange? Present on the Paris market since 1999, the digital services and technology consulting company SII (for “Society for Industrial Informatics”) will in any case be the subject of a public purchase offer (OPA) .

Members of the family of the founder, Bernard Huvé, the management of the company, including the chairman of the board Eric Matteucci, and funds managed or advised by the investment company Blackstone, have signed an investment protocol which brings them to form a concert of shareholders.

The overall operation, which will enable Bernard Huvé to ensure the transmission of his shares to his children via donations, will lead this concert to own 52.65% of the capital and voting rights of SII, through a company created especially for the occasion and called “SII Goes on”.

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Takeover bid at 70 euros

The concert of shareholders will therefore cross the threshold of 30% of the capital from which a public purchase offer (OPA) becomes obligatory. Consequently, “SII Goes on” will submit an offer to the Financial Markets Authority (AMF) for all of the group’s shares (with the exception of those of the concert, self-held securities and shares owned by a former manager), for a total of 8.67 million shares.

The price per share will amount to 70 euros, which reflects a premium of 32.3% compared to the group’s last price at the close of last Friday. If the concert manages via this takeover bid to hold more than 90% of the capital of SII, the company will then be delisted.

“The Familial Huvé group, the director (Eric Matteucci, Editor’s note) and the managers now wish to be accompanied by a professional financial partner to deliver the business plan over the coming years and to be able to seize development opportunities while by alleviating regulatory and administrative constraints and costs linked to listing,” SII explained in a press release.

On the Paris Stock Exchange, SII shares jumped 31% to 69.30 euros to settle in contact with the premium proposed by the concert of shareholders. This brings the company’s market capitalization to 1.39 billion euros.

Attractive terms?

“If the premium is substantial, it is nevertheless not certain that the proposed valuation will be sufficient to exceed the threshold of 90% of the capital and carry out the compulsory withdrawal,” considers Invest Securities.

For its part, Stifel underlines that the financing of the takeover bid will be ensured, at the level of “SII Goes on” by syndicated bank debt and by a contribution of equity and quasi-equity by funds managed or advised by Blackstone. , which represents an amount of around 600 million euros.

“This opportunity, which management is seizing, capitalizes on the sub-optimal financial structure of the SII group, since the group’s net cash flow is very significant: 170 million euros in net cash as of September 30, 2023, i.e. more than a year of Ebitda (gross operating result, Editor’s note)”, dissects the bank.

“It would be easy to imagine that the acquisition debt of the SII Goes On holding company could be offset to some extent by increasing the debt of the SII group once the company has been delisted. It would therefore seem that “SII’s managers are taking advantage of the opportunities offered by the SII Group’s balance sheet to increase their position in SII’s capital rather than accelerating the company’s growth by remaining listed,” she concludes.

If Stifel “regrets” that this operation relies on SII’s sub-optimal financial balance sheet to delist the company, the financial intermediary nevertheless judges that the terms of the takeover offer offered to minority shareholders are “difficult to contest ” and therefore attractive.

According to its calculations, the operation values ​​SII as a whole at more than 15 times the expected operating profit for the 2023-2024 financial year, i.e. much more than its most direct comparable, the outsourced R&D group Alten (valued on the market, 12 times the expected operating profit) or even the French digital services giant Capgemini (14 times), whose activity is very close to the Polish subsidiary of SII, a subsidiary which represents more than half of the group’s sales at the international.

Stifel also estimates that the transaction values ​​SII Poland 18 times the expected operating profit, therefore much more than Capgemini, while the rest of the group (activities in France and internationally excluding Poland) benefit from a multiple of 12 times the expected operating profit, in line with Alten. “The proposed operation is therefore difficult to contest, in our opinion,” repeats the bank.

The Paris Stock Exchange experienced several delistings in 2023 on the mid- and small-cap side. Due to the low liquidity in small and medium-sized stocks and the poor stock market performance of smaller capitalizations in recent years, the controlling shareholders of these companies may decide to withdraw from their group and thus save themselves the costs. and regulatory constraints linked to listing. This has for example been the case, since the start of the year, of the home automation specialist Somfy, the seed company Vilmorin, the tech company Keyrus, the pharmaceutical laboratory Boiron or more recently Colas, a subsidiary of Bouygues, specialized in public works.