Jenoptik to sell off stake in DEWB

The German technology group is looking at ways to reduce its interest in its corporate venture capital operation, Deutsche Effecten- und Wechsel-Beteiligungsgesellschaft, to below 50 per cent.

Jenoptik, the German technology group, is looking to significantly reduce its interest in Deutsche Effecten- und Wechsel-Beteiligungsgesellschaft (DEWB), its corporate venture arm specialising in opto-electronics, biotechnology, and telecommunication/IT.

As a first step towards executing the plan, Jenoptik recently reduced its stake in DEWB from 97 per cent to 92 per cent by way of a share placement. The group intends to further reduce its holding to below the 50 per cent threshold before the end of the year.

According to a DEWB spokesperson, Jenoptik, which is an M-Dax company, is looking to reduce its holding in the venture business in order to eliminate the impact on its forecasting of the inherently volatile and unpredictable performance of the venture capital business. A less than 50 per cent stake in DEWB means that Jenoptik will no longer be required to account for the operation on its balance sheet.

Plans currently under consideration were first formulated in 1999 and later postponed to 2002 when changes in German tax regulations would enable Jenoptik to hive off private equity interests on a tax-free basis. They include the sale of a significant portion of DEWB’s equity to an institutional investor looking to benefit from its technology investment expertise.

Since it began to operate as a dedicated venture capital investor in 1998, DEWB has committed E114m and currently owns stakes in 35 companies. In 2001, it contributed E25m to Jenoptik’s total earnings before interest and tax of E109m.

In the first quarter of 2002, during which no realisations were achieved, DEWB booked negative EBIT of E1.4m. The group says signifcant exists are expected to complete later this fiscal year.

DEWB’s portfolio of investments in private companies by the end of the first quarter 2002 had a book value of E114m. The company also retains interests in eight listed businesses with a current market capitalisation of around E40m.  

Jenoptik Group is keen to remain a DEWB shareholder, partly in order to use it as an exit channel for new businesses that emerge in-house.