(Finance) – doValue get to the heart of theGardant operationa strategic acquisition that will allow the Group to diversify and develop synergies which will guarantee its growth and leadership in the reference market. The November 25th kicked off too the optional offer to the shareholders, which counts on the support of the current shareholders, to strengthen the financial solidity of the group, support future profitability and the creation of value. We talked about it with Manuela FranchiCEO of doValue.
The acquisition of Gardant presents elements of complementarity, including geographical, between the two companies, which make this aggregation more interesting than ever. Does he tell us about it?
Gardant integration results extremely synergistic as it allows us to consolidate the Italian market, which will represent the main source of revenues for the doValue Group with almost half of the aggregate revenues and, at the same time, to extend the services offered by Gardant to the other countries in which we are present, significantly increasing the Group’s development potential, as well as its own diversification.
In particular, the consolidation of the two realities increases significantly the breadth of the customer portfolio of the doValue Group in Italy, adding two long-term agreements of Gardant with two of the largest banking groups in the country (Banco BPM and BPER) and, as regards diversification, the management of scalar UTP (Unlikely To Pay).
Furthermore, through the integration, the doValue Group will benefit from the consolidated relationship with Elliottreference shareholder of Gardant, which will represent a further valuable industrial partner for the Group.
Customers of the new Group will benefit from a first-rate offer and technologywhile Gardant’s expertise in UTPs and credit-focused asset management will be further strengthened.
It is also important to underline how doValue’s ability to efficiently and precisely manage every phase of credit management, from origination to recovery, makes the Group a point of reference for banks and financial institutions throughout southern Europe.
We will leverage the broad, integrated range of products and services offered by doValue. An offer capable of anticipate market changes and to respond promptly to today’s challenges of the NPE market (Non-Performing Exposures), in profound transformation. For years we have stood out among servicers for leadership based on unique expertise in the management of non-performing loans, UTPs and Early Arrears, as well as providing Master Legal, Due Diligence and Master Servicing services. This multidisciplinary approach allows us to offer important added value to customers, in all the markets in which we operate.
At the basis of our operating model there is a constant investment in technology and innovationfundamental elements for developing advanced solutions and creating new opportunities. Thanks to these characteristics, the Group not only increases its profitability but shapes the evolution of the entire sector, promoting efficiency and opening new paths for all the players in the credit ecosystem in the markets in which we are present.
The solidity of the doValue Group has deep roots, one diversified revenue base and long-term contracts signed with leading banking institutions, a sustained growth trajectory projected towards a future of diversification in new products and robust financial results, combined with new servicing agreements, all already outlined in the Industrial Plan 2024-2026 presented last spring.
In particular, Gardant’s UTP platform and capabilities will provide the Group with the scale and know-how to compete in one of the most profitable and promising segments of the Italian NPE market.
What’s more, the Group will also leverage Gardant Investor SGRan asset management company focused on credit, with a collection to date of 715 million euros thanks to various alternative funds and an investment area ranging from NPEs to Direct Lending, capable of strengthening its asset business model -light and fee-based with a recurring revenue stream.
The integration plan for Gardant, developed with the support of a joint working group, will be implemented immediately. This combined plan will allow the Company to quickly realize the expected synergiesestimated at around 15 million euros per year when fully operational starting from 2026.
The operation requires a commitment from the current shareholders, who are essentially asked to support the external growth of the Group. What do you expect? and How will the capital increase be perceived?
The capital increase is only the last step. We have reached the end of a journey in which we have received full institutional support, the green light from the Bank of Italy, Greece and Cyprus, as well as the green light from the Government and the clearance from Consob.
We are asking shareholders to support a strategic investment to encourage the growth of the Group. The funds raised will be used to reduce the group’s debt and thus allow the further development of the activities, the consolidation of the business in Italy through the acquisition of Gardant and our leading position in credit management in Southern Europe. These strategic projects aim to improve future profitabilitywith the aim of offering at the same time a significant return for shareholders. Furthermore, we confirm a competitive dividend policy in the medium term.
The capital increase strengthens financial solidity, thanks also toirrevocable commitment of shareholders like Fortress, Bain, Elliott and some managers of Gardant to subscribe, at the Offer Price, the New Shares issued as part of the Capital Increase for a total value of approximately 82.5 million euros out of approximately 150 million in total.
The remaining part of the capital increase (approximately 67.5 million euros) is offered as an option to the other existing shareholders of doValue, as well as being the subject of a guarantee agreement by the banks of the consortium.
Can you tell us about the main terms of the recapitalization operation, starting from the price which offers a significant discount on the ex-rights stock market price (TERP)?
The price of subscription of the New Shares, equal to Euro 0.88 per shareembed one discount equal to 25.78% compared to the theoretical ex-rights price (so-called “TERP”) of the doValue shares, calculated according to current methodologies, based on the closing price of the doValue shares on November 21, 2024 on Borsa Italiana SpA. The discount on the TERP is in line with similar operations on the Italian market in the last 5 years. Looking at the closing value on Wednesday 27th, the discount on the closing price is approximately 23%. The overall value of the Offer will therefore be equal to a maximum of Euro 149,723,512.40. We have structured the offer carefullybalancing the interests of the company, existing shareholders and new ones. The defined discount in fact allows existing shareholders who do not wish to subscribe to the capital increase to monetize the option right by selling it on the market.
The option rights for the subscription of the New Shares are negotiable on Euronext Milan from 25 November to 6 December 2024 and exercisable from Monday 25 November to Thursday 12 December 2024, what we define as the Option Period. THE Option Rights exercisable, taking into account the treasury shares held by the Company, amount to 19,444,612. Each existing shareholder received 1 Option Right for each doValue share held. You will be able to subscribe to 35 new doValue shares at a price of 0.88 each for every 4 rights held.
Doctor Franchi, you lead a team of excellence. What are the prospects and with what climate do you look to the future?
Through an efficient integration process, we will strive to enhance the consolidated experience of the teams doValue and Gardant, highlighting the particularities and points of excellence. I am convinced that the integration of the activities will make us even stronger, thanks above all to the cultural alignment between the two organizations, a key element in promoting long-lasting collaboration and greater operational efficiency.
Finally, the Group is led by a experienced management teamsupported by a strong corporate governancemade up of prestigious shareholders such as Fortress, Elliott and Bain Capital. Thanks to these solid foundations, the Group will play a leading role in Italy and the Hellenic regionready to redefine the future of credit management in Southern Europe and seize the opportunities of an ever-evolving world.