JZ CAPITAL
PARTNERS COMPLETES SALE OF
SIX EUROPEAN
INVESTMENTS FOR €96.3 MILLION
09 February 2016
JZ Capital Partners Ltd. (LSE: JZCP.L, “JZCP” or the
“Company”), the London listed fund
that invests in US and European microcap companies and US real
estate, has completed the sale of six of its European investments
(held through the EuroMicrocap Fund 2010, L.P. (“EMC 2010”)) to a
major financial institution for €96.3 million ($104.6 million).
This transaction will be completed in two phases. Firstly, on
February 1, 2016, JZCP sold its stake
in the first five assets (Docout, Ombuds, One World Packaging, Toro
Finance, and Xacom) for €75.2 million. Secondly, JZCP will sell its
stake in Winn for €21.1 million[1] when regulatory approval is
received (estimated 4-6 months). Once both phases are completed,
JZCP expects to have realized an aggregate gross multiple of
invested capital (“MOIC”) of 1.6x in constant euros[2] (1.3x after
accounting for FX losses).
The sale was undertaken as a secondary transaction and priced at
net asset value (“NAV”). In addition to validating the Company’s
NAV, this transaction provides JZCP with significant liquidity to
pursue further investment opportunities across its three portfolios
(US microcap, European microcap and real estate).
JZCP sold four out of the six companies at premiums to cost. Had
these four companies been sold separately, they would have
generated a 2x aggregate gross MOIC in constant euros (1.7x after
accounting for FX losses). The other two investments were sold at a
discount to cost, but at JZCP’s current NAV.
Furthermore, JZCP will hold onto its equity stake in the three
remaining companies in EMC 2010 (Factor Energia, Fidor Bank, and
Oro Direct), which had an aggregate fair value of €84.2 million and
an aggregate gross unrealized MOIC of 3.1x in constant euros (2.6x
after accounting for FX losses) at the secondary transaction’s
valuation date.
The announcement marks further progress made with several
initiatives completed in the past year which have secured repayment
of the 2016 ZDPs and allowed the Company to take advantage of a
healthy investment pipeline, including:
- $181.5 million raised via the
issuance of new ordinary shares (net £77m / $117.8m) and rollover of approximately £41.6
million ($63.7m) of our current 8%
ZDPs due 2016 into a longer-dated ZDP with a much lower yield.
- $124.2 million in proceeds from
the full realization of four US portfolio companies.
Together with the secondary sale today, the Company has realized
or raised more than $410 million in
the past year.
David Zalaznick, JZCP’s
Founder and Investment Adviser, commented: “We have been
working for the past year on building the liquidity of JZCP for two
important reasons: to raise capital for new investments ahead of
realizations and to have sufficient funds to repay the balance of
the ZDPs due June 2016. In the past
fiscal year, we have realized or raised more than $410 million, a significant achievement given our
market cap is c.$480 million and we
continue to trade at a c.40% discount to NAV.”
Ends
For further information:
Ed Berry / Kit Dunford
+44 (0) 20 3727 1143
FTI Consulting
David Zalaznick
+1 212 485 9410
Jordan/Zalaznick Advisers, Inc.
Paul Le
Ray
+44 (0) 1481 745815
JZ Capital Partners, Ltd.
About JZCP
JZCP is a London listed fund which
invests in high quality US and European microcap companies and US
real estate. Its objective is to achieve a superior overall return
comprised of a current yield and significant capital appreciation.
JZCP receives investment advice from Jordan/Zalaznick Advisers,
Inc. (“JZAI”) which is led by David
Zalaznick and Jay Jordan.
They have worked together for 30 years and are supported by teams
of investment professionals in New
York, Chicago, London and Madrid. JZAI’s experts work with the existing
management of microcap companies to help build better businesses,
create value and deliver strong returns for investors. JZCP also
invests in mezzanine loans, first and second lien investments and
other publicly traded securities. For more information please visit
www.jzcp.com.
[1] From February 1, 2016 until
the close of the second portion of the transaction, the
institutional buyer will pay JZCP 8% interest on the €21.1 million
purchase price for Winn.
[2] Gross MOIC (constant euro) figures are for illustrative
purposes only, assuming that EuroMicrocap Fund 2010, L.P. was a
euro-denominated fund (EuroMicrocap Fund 2010, L.P. is a US
dollar-denominated fund).