Regulatory News:
Eurofins Scientific (Paris:ERF) (EUFI.PA), a world leader in
bioanalytical testing, announces that it has privately placed
606,061 newly-issued shares with La Caisse de dépôt et placement du
Québec (“CDPQ”), one of Canada’s largest institutional fund
managers, at a subscription price of EUR 330 per share, raising EUR
200m of additional cash for the Group.
Other than stock options and warrants for its staff and
management, this is Eurofins’ first equity issuance since October
2000, and represents a slight dilution of under 3.8% for its
existing shareholders. Proceeds of the transaction will be used to
optimize the Group’s capital structure, thereby increasing
Eurofins’ ability to respond swiftly to strategic, value-enhancing
opportunities, with the objective to create higher earnings per
share (EPS) than the dilution impact from the new issuance. The
transaction should increase Eurofins’ strategic options going
forward, as well as the Group’s ability to generate value for its
shareholders.
As communicated several times previously1, even without this
additional equity, as can be judged based on current trends, the
Group management believes that Eurofins should be able to continue
generating at least 5% organic growth and acquire about EUR 200m of
external revenues per year to progress towards its objective of
doubling in size again to reach EUR 4bn of revenues and EUR 800m of
adjusted EBITDA by 2020. Indeed, given its liquidity and the
strength in current operating trends (continuing in line with the
ones observed in the first quarter of 2016)2, Eurofins’ management
does not believe it required additional funding to execute on this
mid-term plan. However, the management also believes that the
further optimization of its balance sheet and overall capital
structure resulting from the CDPQ investment should enable the
Group to respond swiftly to compelling larger opportunities if, and
when they materialize, which could significantly accelerate the
achievement of its mid-term objectives.
One of Eurofins’ stated objectives for 2016, rather than
hoarding cash on its balance sheet, was to work towards a more
flexible access to funding to be able to respond to large M&A
opportunities should they arise3. In addition to this EUR 200m
investment, CDPQ has indicated a strong interest in supporting
further investments by Eurofins. Several current large investors of
Eurofins have also indicated strong interest in participating in
further equity raises should they become required for one or
several larger transactions. In this context, an investment of
606,061 shares from an investor committed to further capital
deployment appeared preferable to issuing 1 million shares
immediately, as considered in December 2015.
In addition, over the last few quarters, Eurofins has also
secured further flexible bank financing that it only needs to draw
as required. Over the next few months, Eurofins also intends to
repay and refinance its older Schuldschein and OBSAAR bonds (of
which EUR 170m and EUR 59m respectively remain due as of end June
2016) with instruments with longer maturities.
CDPQ, one of the largest institutional fund managers in North
America, has a solid track record of long-term investments in
companies that are leaders in their fields of activities, and that
have proven ability to generate sustainable shareholder returns. As
a manager of pension and insurance funds, CDPQ has a long
investment horizon, providing the companies it invests in stable
financial support over time.
Comment from Dr. Gilles Martin, Eurofins CEO: "This transaction
provides Eurofins with the ability to potentially accelerate the
achievement of its mid-term plan, should the opportunity arise, and
create significant incremental shareholder value with limited
dilution. CDPQ’s approach of focusing on long-term financial
returns on its investment and deploying long-term partnerships with
the companies it invests in, which may include supporting larger
acquisitions, is entirely consistent with Eurofins’ strategy of
deploying capital for long-term value creation and securing
flexibility in its future funding. We look forward to a mutually
beneficial partnership with CDPQ.”
Comment from Roland Lescure, Executive Vice-President and Chief
Investment Officer at CDPQ: “With a solid, visionary management
team, Eurofins has successfully established itself as a world
leader in the cutting-edge market segment of bio-analysis testing.
Under the leadership of Stephane Etroy, Head of Europe Private
Equity, CDPQ will support Eurofins’ management team as it pursues
its international growth plans and puts innovation forward to
develop the company over the long term."
For more information about Eurofins, please visit
www.eurofins.com
For more information about CDPQ, please visit
www.cdpq.com
Notes for the editor:Eurofins – a global leader in
bio-analysis
Eurofins Scientific believes it is the world leader in food,
environment and pharmaceutical products testing, as well as one of
the global market leaders in agroscience, genomics, discovery
pharmacology and central laboratory services. In addition, Eurofins
is one of the key emerging players in specialty clinical diagnostic
testing in Europe and the USA.
With over 23,000 staff in more than 225 laboratories across 39
countries, Eurofins offers a portfolio of over 130,000 validated
analytical methods for evaluating the safety, identity,
composition, authenticity, origin, traceability and purity of
biological substances and products, as well as for innovative
clinical diagnostic. The Group provides its customers with
high-quality services, accurate results on time and expert advice
by its highly qualified staff.
Eurofins is committed to pursuing its dynamic growth strategy by
expanding both its technology portfolio and its geographic reach.
Through R&D and acquisitions, the Group draws on the latest
developments in the field of biotechnology and analytical chemistry
to offer its clients unique analytical solutions and the most
comprehensive range of testing methods.
As one of the most innovative and quality oriented international
players in its industry, Eurofins is ideally positioned to support
its clients’ increasingly stringent quality and safety standards
and the expanding demands of regulatory authorities and healthcare
practitioners around the world.
The shares of Eurofins Scientific are listed on the Euronext
Paris Stock Exchange (ISIN FR0000038259, Reuters EUFI.PA, Bloomberg
ERF FP).
About Caisse de dépôt et placement du Québec
CDPQ is a long-term institutional investor that manages funds
primarily for public and parapublic pension and insurance plans. As
at December 31, 2015, it held CAD 248 billion in net assets.
As one of Canada’s leading institutional fund managers, CDPQ
invests globally in major financial markets, private equity,
infrastructure and real estate. CDPQ is headquartered in Quebec
City and has offices in Montréal, London, Paris, New York,
Washington, Mexico City, New Delhi, Singapore and
Sydney.www.cdpq.com
Important disclaimer:This press release contains
forward-looking statements and estimates that involve risks and
uncertainties. The forward-looking statements and estimates
contained herein represent the judgement of Eurofins Scientific’
management as of the date of this release. These forward-looking
statements are not guarantees for future performance, and the
forward-looking events discussed in this release may not occur.
Eurofins Scientific disclaims any intent or obligation to update
any of these forward-looking statements and estimates. All
statements and estimates are made based on the information
available to the Company’s management as of the date of
publication, but no guarantee can be made as to their validity.
1 Press releases dated 13 October 2015; 10 December 2015 and 29
February 2016.2 Full year 2015 results press release dated 29
February 2016; Q1 2016 Interim Management Statement dated 25 April
2016.3 Full year 2015 results press release dated 29 February 2016,
p.2 Comment from the CEO
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version on businesswire.com: http://www.businesswire.com/news/home/20160629006152/en/
Investor RelationsEurofins Scientific GroupPhone: +32 2 766
1620E-mail: ir@eurofins.comorCDPQJean-Benoit Houde, Phone: +1 514
847 5493E-mail: jbhoude@cdpq.com
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