1 / 22

Excellence in financiering

Excellence in financiering in Initial Public Offerings in Private Equity in Venture Capital in M&A. Excellence in financiering. Bas van Werven BNR Nieuwsradio. Private Equity, Going Public or M&A – any difference? Daan Witteveen (Partner Deloitte Corporate Finance) Galápagos N.V.

dalila
Download Presentation

Excellence in financiering

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Excellence in financieringin Initial Public Offeringsin Private Equityin Venture Capital in M&A

  2. Excellence in financiering Bas van Werven BNR Nieuwsradio

  3. Private Equity, Going Public or M&A – any difference? Daan Witteveen (Partner Deloitte Corporate Finance) Galápagos N.V. Onno van de Stolpe (CEO) Vedior N.V. Frits Vervoort (CFO) Capital Markets versus Private Equity Mark de Graaf (Managing Director ECM ING) Program

  4. Private Equity, Going Public or M&A – any difference? Daan Witteveen Partner Deloitte Corporate Finance

  5. M&A, Private Equity and IPO’s are triggered by value creation opportunities - though require excellence to realise the full potential • Maturity • Private Equity Buy-out • M&A • IPO (buy & build) • High growth • Development capital (PE) • IPO • M&A • Early stage growth • Venture Capital • Corporate Venturing • ... • Start-up • Informal investors • ...

  6. Excellence creates options : Private Equity, IPO or M&A ? DC & PE IPO M&A • A strong track record of management • Motivated management team capable of meeting expectations of stock market • Audited financial information (3yr) • High quality internal controls and financial reporting • Disclosure controls & procedures • Sustainable competitive advantage • Attractive market opportunity • Availability of expansion opportunities (Buy and Build) • Price / earnings, Earnings growth, Market cap • Corporate Governance • Free Float • A strong track record of management • Motivated management team capable of executing the strategic plan and managing growth • Audited financial information • High quality internal controls and financial reporting • Sustainable competitive advantage • Attractive market opportunity • Availability of expansion opportunities (Buy and Build) • Cash Flow, IRR, Cash multiple • Exit strategy • Motivated management team capable of executing the strategic plan and managing growth • Audited financial information • High quality internal controls and financial reporting • Sustainable competitive advantage • Attractive market opportunity • Cash flow • Sector multiples

  7. Excellence creates options : Private Equity, IPO or M&A ? DC & PE IPO M&A • Motivated management team capable of executing the strategic plan and managing growth • Audited financial information • High quality internal controls and financial reporting • Sustainable competitive advantage • Attractive market opportunity • Cash flow • Sector multiples • A strong track record of management • Motivated management team capable of executing the strategic plan and managing growth • Audited financial information • High quality internal controls and financial reporting • Sustainable competitive advantage • Attractive market opportunity • Availability of expansion opportunities (Buy and Build) • Cash Flow, IRR, Cash multiple • Exit strategy • A strong track record of management • Motivated management team capable of meeting expectations of stock market • Audited financial information (3yr) • High quality internal controls and financial reporting • Disclosure controls & procedures • Sustainable competitive advantage • Attractive market opportunity • Availability of expansion opportunities (Buy and Build) • Price / earnings, Earnings growth, Market cap • Corporate Governance • Free Float

  8. Monetising M&A opportunities- corporates versus private equity Deloitte indicative rating Poor practice Best practice 1 2 3 4 5 6 7 Clarity / Consistency of M&A strategy Corporate centre / divisional interworking Pre-deal integration planning Valuation / Diligence Technical & negotiationkills Management team selection& Iincentivisation Corporate centre / divisional interworking Measurement & accountability Delivering planned profit improvements Disciplined portfolio evaluation Sale Preparation & Exit Clarity of M & A strategy, staff turnover and conflicting objectives were common problems Pre-deal Pre-deal integration planning, valuation and technical execution skills generally appeared in line with Private Equity Measurement & accountability consistently problematic, with many corporates defeated by complexity of post-merger factors Post-deal Sharp divergence in practice – corporates viewing divestment as a necessary evil not a value creation event Portfolio : Sample mean

  9. Operational inprovements increasingly determinereturns of private equity …

  10. Private Equity, Going Public or M&A – any difference? • M&A, Private Equity and IPO’s all require excellence to fully monetise on value creation opportunities • Excellence creates value ! • Freedom to benefit from IPO, Private Equity or M&A windows • Operational inprovements increasingly determinereturns of private equity (… likewise corporates!)

  11. Galápagos N.V. Onno van de Stolpe CEO Galápagos

  12. Galapagos fact sheetRapid growth 1999 founded by Crucell & Tibotec 2002 VC financing: specialised life science investors 2005 IPO on EuroNext, acquired BioFocus through shares 2006 Private placements & 3 acquisitions: DPI assets, Inpharmatica, ProSkelia

  13. Capital raised • €6 M by founders Crucell & Tibotec in 1999-2001 • €23 M venture capital financing in 2002 • €22 M raised in IPO 2005 • €11 M placement in September 2006 • €31 M placement in December 2006 Price paid per share € 4 € 6.3 € 7 € 8.1 € 8.5 € 8.8 € 8.95 ’99-’01 Founders ’02 VC A-round ’05 IPO ’05 BioFocus acquisition ’06 Secondary Inpharmatica acquisition ProSkelia acquisition

  14. Business model Top 5 service provider Profitable services & products Drug discovery platform € Novel drug candidates bone & joint diseases

  15. High growth, increasing loss 33 60-64 Revenues R&D investment Loss 0 16 35.2 15.9 35 2 14 30 3.6 12 04 25 10 6 6.5 20 8.9 08 7.3 15 06 8 11.2 04 10 7.8 10 02 11.3 05 12 00 00 04 05 06 07guidance 04 05 06 07guidance 04 05 06

  16. IPO financing vs VC • Advantages • Length of process - 5 months vs 1 year • Use of paper to build business - 3 companies acquired though all shares • Capability to (always) raise additional capital - €46 raised since IPO • Visibility • Disadvantages • Glass house • No control on investor base vs (selected) expert investors • CEO/CFO time for investors

  17. Vedior N.V. Frits Vervoort CFO Vedior

  18. Other • Europe • 9% • Other • Sectors • 8% • Canada • 3% • Education • 1% • Netherlands • 7% • Australia/NZ • 5% • Engineering • 7% • Spain 6% • IT 9% • France • 40% • Belgium • 6% • Accounting • 5% • Traditional • 64% • UK • 13% • Healthcare • 6% • Latin America, • Asia, Middle East • and Africa3% • US • 8% Sales Breakdown – Q3 2007 By Geography By Sector Revenues 2006 : EUR 7.7 billion Net profit 2006 : EUR 186 million Number of offices : 2.534 Number of countries : 50

  19. Senior Note Debt Placement USD 215 million 7 & 10 year maturity Equity issue raising €702 million Appointment of Tex Gunning as CEO; Start of Strategic Review New revolving credit facility €800 million Promotion to AEX index Vedior spin-off from vendex Vedior Timeline Acquisition of BIS (France) IPO Sale of cleaning services business,€490 million Acquisition of Select for €1,825 million 97 98 99 00 01 02 03 04 05 06 07 200220032004200520062007 Number of Acquisitions 9 3 4 8 12 6Revenues (EUR million) 75 5 54 63 331 136Consideration (EUR million) 39 1 12 44 159 110

  20. Strategic PositioningLong term drivers staffing market • Cyclical & Structural growth driven by deregulation and demographic trends • Vedior: Balanced revenue stream / Expansion into Asia, Eastern Europe, Latin America Geographic Exposure Sector Exposure • Growth potential greatest in professional staffing and permanent placement • Vedior: Focus on professional and executive staffing • Expansion into new segments and/or markets; pricing discipline is key • Vedior: Bolt-ons in professional segments with management retaining minority share M&A Strategy • Clear strategy; Simple and measurable targets • Vedior: Target operating margins by geography / Overall 4.6% - 5.6% EBIT margin Management andStrategy • Ability to deliver cash flow generation across cycle, incl buy-back & increased dividend • Vedior: Objective to increase dividend each year/Free cash flow used for acquisitions Shareholder ValueFriendly • Return of cash across the cycle; • FCF reinvestment into small to medium sized acquisitions a potential source of upside • Vedior: Use of debt to finance working capital / Conservative financing policy Balance Sheet

  21. Balance Sheet • Solid investment grade balance sheet over the cycle • Net debt / trade receivables: 25%-50% (Q3: 27%) • Interest cover > 6.0x (Q3: 12.8x) • Net debt / EBITDA < 2.5x (Q3: 1.2x) • Diversification of funding sources and maturities • Committed Bank Facilities • Local uncommitted credit lines for working capital • Private debt placements

  22. Member of Deloitte Touche Tohmatsu

More Related