ENVEA and Carlyle begin exclusive negotiations

Following the public communication dated June 29, 2020, the ENVEA Group, together with its executives and its founder, are pleased to have initiated a process of buying back its shares on the market in partnership with Carlyle European Technology Partners.

The Group, which has exceeded the €100M milestone, is now entering a new stage of development while maintaining its current organisation and management team.

This operation remains subject to the approval of the competent authorities, and could be finalized in the second half of 2020. Its achievement will enable the ENVEA Group to benefit from extended financial capacities, in order to accelerate the implementation of its growth strategy both in France and internationally.

The proposed transaction is subject to customary regulatory approvals and would be expected to close in the second half of 2020. Equity for the investment will come from Carlyle Europe Technology Partners IV (CETP IV), a €1.35 billion fund that invests in lower middle market technology-focused companies in Europe and the US.

CETP IV would acquire through a Special Purpose Vehicle (SPV), the shares held directly or indirectly by the founder of ENVEA, François Gourdon, and by the key executives of ENVEA, together representing 28.2% of the share capital of the company. Approximately 84% of those shares would be acquired for cash at a price of €110 per share, and the remaining shareholding would be rolled over to the SPV at the same unit price.

The SPV would also acquire, at the same cash price of €110 per share, the respective shares in ENVEA held by (i) additional managers or former managers of ENVEA representing in aggregate 3.8% of the share capital of ENVEA, as well as by (ii) fifteen institutional investors representing in aggregate 23.9% of the share capital of ENVEA. Given the above, the SPV would acquire approximately 55.8% of the share capital of ENVEA, representing approximately 63.6%1 of theoretical voting rights. The Group will continue to be led by the current management team.

If the block trade is completed, the SPV controlled by The Carlyle Group will file a mandatory simplified tender offer at an identical price of €110 per share for all of the outstanding ENVEA shares not held by The Carlyle Group. The SPV has no intention to implement a squeeze out upon closing of the tender offer. In any case, the ENVEA’s Board of directors will appoint an independent expert, as required by article 261-1 I of the AMF general regulation.

The price of €110 per share (ex 2019 dividend of €0.95, which will be paid on 9 July 2020) values 100% of the shares of ENVEA at approximately €186 million (fully diluted including the 48,820 free shares plan of 21 October 2019). This represents premiums2 of 25.2% to the average closing quoted market price (weighted for daily trading volumes) over the 250 trading days prior to 26 June 2020, 9.3% to average weighted closing quoted market price over the 60 trading days prior to that date, and 8.9% to the closing quoted market price on that date.

Signature of the final agreements is subject to consultation with the employee representative bodies of ENVEA, and completion of the transaction would be subject to the usual regulatory conditions, including antitrust clearance from the Austrian antitrust authority and the foreign investment clearance from the French Minister of Economy. Closing of the public tender offer would be expected during the fourth quarter of 2020. ENVEA and The Carlyle Group will keep the market informed of any significant developments in the proposed transaction. The quotation of ENVEA shares, suspended as of today, will resume by 30 June 2020.

ENVEA’s monitoring solutions are sold in over 70 countries. The company has development potential in less equipped regions such as India and China as well as with its blue-chip clients – notably in Europe, thanks to tighter regulation on pollutants worldwide. This proposed deal will give ENVEA more flexibility to implement its long-term strategy, while also limiting the constraints created by Covid-19 development in the near future.

ENVEA has recorded revenues of €100.4m in 2019 (an increase of 9.6% compared to 2018) and €14.7m of EBIT, representing a margin of 14.7%.

In 2020, ENVEA’s growth trajectory has been affected by the Covid-19 crisis and the lockdowns and restrictions in all major geographies. During the first 4 months of 2020, ENVEA has recorded consolidated revenues of €23.8m, a decrease of 22% compared to €30.7m from the same period in 2019. Management expects to catch up part of this revenue decrease in the second half of the year and currently targets sales between €95m and €100m in 2020, assuming the global Covid-19 crisis resolves in the most impacted geographies, and ENVEA can deliver its backlog.