Apax supports the growth strategy of D+S europe AG as new core share-holder
15 April 2008
• Apax offers D+S europe shareholders EUR 13.00 per share in the context of a Voluntary Public Tender Offer (in accordance with § 29 WpÜG)
• After the signing of a capital increase and including shares secured through SPA and Irrevocable undertakings, Apax will hold a total of 27% of the diluted share capital
• The Management Board of D+S europe AG supports the transaction on the basis of an Investment Agreement
• No Domination Agreement is intended by Apax
München/Hamburg 15th of April, 2008 – Pyramus S.à r.l., a company based in Luxembourg and controlled by funds advised by Apax Partners Worldwide LLP, today announced pursuant to § 10 WpÜG that it intends to offer the shareholders in D+S europe AG (ISIN: DE0005336804 and DE000A0TGHU) EUR 13.00 per share in the context of a Voluntary Public Tender Offer pur-suant to § 29 WpÜG. D+S europe is a company with more than 5600 em-ployees that holds leading positions in full-service e-commerce solutions and customer contact management. The offer is entirely equity financed, will not have a minimum acceptance threshold, and does not foresee an im-plementation of a Domination or Profit and Loss Transfer Agreement.
Pyramus S.à.r.l., which is funded by Apax VII fund, currently the largest European private equity fund, has as a first step signed a capital increase of 3,271,000 shares, which corresponds to 8.71% of the undiluted share capital of D+S europe. The share capital after this capital increase amounts to EUR 40,842,941. The capital increase is executed out of authorized capital under the exclusion of existing shareholders’ pre-emption rights at an offering price of EUR 13.00 per share.
In addition, Apax has entered into SPAs and irrevocable undertakings to accept the offer, respectively, with a number of large institutional shareholders of D+S europe including the AvW Group, TOCOS Beteiligungsgesellschaft, and ASP Holding, a com-pany connected to the Management Board member Sven Heyrowsky. As a result, Apax has secured 27% of the share capital post capital increase.
Apax is making a Voluntary Public Tender Offer without minimum acceptance thresh-old to the free-float shareholders on the same terms as were offered to, and ac-cepted by the large block-holders. The offer is EUR 13.00 per share and corresponds to a 44% premium vs. the 3 months Volume Weighted Average Price (source: Bloomberg) prior to the announcement of the offer. Irrespective of the acceptance level, it is the intention to leave D+S europe listed.
The completion of the transaction should according to the Investment Agreement only be subject to cartel clearance of the transaction i.e. not subject to any minimum threshold or any other conditions precedent. The offer is completely financed through Apax VII equity. According to the Investment Agreement, there is no intention to en-ter into a Domination and/or Profit and Loss Transfer Agreement with D+S europe.
At present, based on the information given to them, the Management of D+S europe AG supports the takeover offer of the bidder, namely for the following reasons:
(i) The bidder is prepared to take a holding in D+S europe AG, adding EUR 42,523,000.00 in cash to the company prior to the successful conclusion of a take-over by way of a capital increase for cash of about 8.71% of the current nominal capital at an issue price per share corresponding to the tender price for the takeover bid considered by the bidder in the amount of EUR 13.00, which significantly exceeds the current market price. A fairness opinion of NordLB obtained by Management ar-rives at the conclusion that the tender price announced by the bidder of EUR 13.00 is fair and adequate from the financial aspect at the present time.
(ii) According to the Investment Agreement the bidder agrees to invest in D+S europe AG on a long-term basis and to accompany the enterprise’s growth strategy as reliable financing partner, as underpinned by participation in the capital increase for cash.
(iii) In the Investment Agreement the bidder is principally committed to maintain-ing a minimum amount of holding of at least 50% of the current nominal capital of D+S europe AG for a period of three years.
(iv) According to the Investment Agreement the bidder intends to maintain D+S europe AG’s independence as a listed enterprise in the medium term and to leave its head office in Hamburg. In this agreement the bidder expressed his full confidence in the present business model of D+S europe AG and its Management as well as its in-tention to make no changes to the personnel structure.
(v) The bidder does not intend to finance the takeover bid by means of outside capital thus increasing D+S europe AG’s leverage, or to effect a particular – possibly financed through outside capital – dividend payment by D+S europe AG.
Moreover, in the Investment Agreement Management of D+S europe AG has an-nounced in the scope of its duties and responsibilities according to German law, to support the takeover offer of the bidder in particular its obligations of care, loyalty and good faith as well as other requirements covered by the German takeover act and subject to an inspection to be performed after publication of the bidding docu-ment.
The Management Board of D+S europe AG supports the entry of Apax as core shareholder
“We are happy that we have found in Apax a partner and long-term oriented investor that supports and secures our future growth strategy. D+S europe AG will benefit from the strong financial resources of Apax, its extensive international network, and its long experience in the consumer, technology and telecommunication industries. In particular, financial support from a strong partner such as Apax Funds is of enormous significance in the current difficult financial environment. This allows the Management Team to fully concentrate their energy on the operative challenges and the resulting opportunities, knowing that we work from a position of strength,” says Dipl.-Ing. Achim Plate, CEO of D+S europe AG. “After analysing different growth and financing alternatives, we have chosen a strong partner in Apax, who will in the future provide us with growth financed via equity, creating financial flexibility and providing an at-tractive opportunity for our shareholders to realise capital gains resulting from past, successful developments of D+S europe AG”.
Apax supports management’s growth strategy
“The Apax Funds are investing in a company that during the past years has devel-oped very positively and with its successful management has achieved all its growth objectives. The management has our full confidence and Apax will fully back the con-tinuation of the current growth strategy,” said Dr. Christian Näther, Partner at Apax Partners.
Hamburg will remain the company’s head office from where the highly motivated team of D+S Europe AG will continue to lead the future growth of the company. The Apax funds do not anticipate the conclusion of a Domination and Profit and Loss Transfer Agreement. Apax will finance the entire transaction out of equity, and thus does not rely on any debt financing. The shares of D+S europe AG will continue to be publicly traded as before using the tracker DSJ. All parts of the transactions continue to be subject to clearance by the competent authorities.
About Apax Partners
Apax Partners is one of the world’s leading private equity investment groups. It op-erates across the United States, Europe, Israel and Asia and has more than 30 years of investing experience. Funds under the advice of Apax Partners total $35 billion around the world. These Funds provide long-term equity financing to build and strengthen world-class companies. Apax Partners Funds invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Fi-nancial & Business Services. For more information visit: www.apax.com.
About D+S europe
With over 5,600 employees internationally D+S europe AG is the leading solutions provider for comprehensive e-commerce and customer contact management. Re-gardless of the communication channel, whether via fixed or mobile network, Inter-net, TV or in writing, D+S europe AG manages the contacts of internationally leading enterprises with millions of private customers. For renowned brand manufacturers D+S europe operates online shops and their Europe-wide e-commerce business. D+S europe AG's share is listed in Prime Standard and SDAX. For further information please refer to www.dseurope.ag.
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