Wendel reports 58% increase in profits

The Paris-based investment house will have €1bn available for acquisitions following the upcoming flotation of Legrand and its purchase of Materis.

Listed French investment firm Wendel Investissement has reported net income of €295 million ($357 million) in 2005, an increase of 58 percent on 2004.
 
Wendel also reported an increase in its net asset value, with NAV per share in March 2006 totalling €94 per share, up 40 percent on €68 per share in March 2005.
 
“The group’s value increased by 37 percent in 2005 and its share price by 57 percent,” said Jean-Bernard Lafonta, chairman of the executive board of Wendel Investissement, in a statement. “The favourable trend in the performance of subsidiaries and the scheduled acquisition of Materis enable Wendel to pursue its dynamic growth.”
 
Wendel said portfolio companies Bureau Veritas and Editis contributed strongly to its results. The firm said profits from Bureau Veritas, a service company specialising in social accountability, grew more than threefold, from €40.9 million to €139.6 million. Editis, a French publisher, contributed €30.1 million to Wendel’s net income.
 
French electrical equipment manufacturer Legrand is scheduled to float on April 7, priced between €17 and €19.75 per share, giving the company a market capitalisation of between €4.6 billion and €5.4 billion.
 
Wendel and US-based private equity firm Kohlberg Kravis Roberts both have a 37.4 percent stake in Legrand. Wendel and KKR jointly acquired Legrand in a €5.1 billion transaction in late 2002. The remaining equity is held by Montagu Private Equity, Goldman Sachs Capital Partners, WestLB and the company’s founding families.
 
Wendel said it will hold approximately 30 percent of Legrand’s capital following the IPO.
 
After the Legrand flotation and the currently ongoing acquisition of building materials company Materis Group for an enterprise value of €2.1 billion, Wendel will have approximately €1 billion available for acquisitions. The firm said it will contribute €310 million in equity and hold 74 percent of the capital of Materis, which Wendel is buying from LBO France.
 
Disposals in 2005 generated a total of €650 million. These comprised the sale of steel abrasives group Wheelabrator Allevard to LBO France; the disposal of an 8 percent stake in auto parts maker Valeo; and the realisation of the firm’s remaining equity interest in technology services group Capgemini.