Candover Investments Share Discussion Threads

[skyship] 31/7/2015 09:26

No problem...

[iainjross] 31/7/2015 09:13

"Am I missing something here?"

Obviously the ability to understand the concept of NET asset value................

Oh well thanks for that I shall have another look.

[rcturner2] 31/7/2015 07:22

A for effort and E for content.

[skyship] 30/7/2015 17:55

Iain - Errr - surely the clue is in the term net asset value - that's NET after DEBT.

[iainjross] 30/7/2015 15:58

I saw Skyship's post on the Fool and had a good read through the posts on here, those by Felix99 were very useful, and this thought this was looking like a nice opportunity but on having a deeper look at the numbers I am just not sure I see the attraction here.

Assume that the Net Asset Value is written down to £100m in August. Given that the US loan notes are due in Dec then the new loan facility shall be exercised. I shall assume that they draw it all (E52m) and so:

E19.4m @ 1.15 years (13%) = 2.522 + 0.3783 = E2.9003m
E32.6m @ 2.75 years (13%) = 4.238 + 4.238 + 3.1785 = E11.6545m
Total = 52 + (2.9 + 11.65) = 52 + 14.55 = E66.55m (£46.68m)

So paying back the loan and interest leaves £53.4m (100 - 46.68) and this gives a Net Asset Value per share of 245.18p (53.4 / 21.78 * 100) which is below the current share price.

It seems the share price already has a premium built into it. Am I missing something here?

All comments welcome.

[topvest] 28/7/2015 20:59

We are all making the same point. This was an absolutely rubbish RNS today which told us very little.

Also, why have they not separated the valuation in the annual report? I have thought this every time I have reviewed the accounts given the two businesses were separated some time ago.

All smoke and mirrors. Looks like a loss on disposal for a fine business to me and GKN are obviously getting a good deal.

Typical Private Equity. High sale price, but slim equity and so minimal cash proceeds. I think they should be made to reissue today's RNS given it was a total garbage announcement that left everyone none the wiser.

[woodenman] 28/7/2015 19:57

Fokker's last AR can be found here: hxxp://publ.sh/proxy/?pub=1023535&token=a5be6cffef69e6259de4ee22f43a26b1&;lang=en

€757.9m revenue for €53.2m EBIT for FY 2014. It also had €200m debt (so €506m equity value for the deal)

Stork 2014 AR reports €1492.3 revenue for €81.1 EBITDA

Also, I wouldn't have expected the deal to touch Stork's debt, as the two entities have been managed separately since 2013

According to the Candover AR, Candover had 4.6% of the equity interest in Stork BV. I make this 4.6% * €506m = €23m or about £16.6m. Not sure where the €9m is from, maybe there is debt attached to the Candover equity holding hence 'net cash'?

If I've not massively oversimplified then £16.6m is a good chunk of the £30.9m Dec14 NAV for Stork, especially seeing that it's the smaller of the two businesses.

[eeza] 28/7/2015 09:11

From BBC news

UK engineering group GKN is buying Netherlands-based Fokker Technologies for £706m including debt, to strengthen its position as a supplier to aircraft manufacturers. Fokker is a big supplier to the Airbus A350 and the Lockheed Martin F-35 fighter programmes. GKN also reported pre-tax profits up 4% to £307m for the six months ending 30 June, boosted by better trading in its car parts supply business.

[rcturner2] 28/7/2015 08:04

As far as I can tell Stork BV was essentially 2 business, Stork and Fokker.

This is the latest statement from Stork:



Quarterly revenue of euro 352m.

Hard to know what the balance of NAV between Stork and Fokker was in the existing Stork BV. Might have been 1/3 Fokker and 2/3 Stork for example, which is then a loss on the £30m valuation, but that seems unlikely given the Candover trading update and the strong figures from Stock in the link above.

[skyship] 28/7/2015 07:52

Agree that they could have been more informative with the RNS in terms of value versus Dec'14 valuation. But glad to see sales now starting & happy to wait for end August for full clarification in the Interims.

[rcturner2] 28/7/2015 07:39

Stork was in the Candover books at £30m at the last analysis.

[n0rbie] 28/7/2015 07:34

"The sale will generate net cash proceeds for Candover of circa €9 million through a partial realisation of its investment in Stork BV."

From a $706M sale, this doesn't sound like much. Does this mean the rest of Stork BV on our books is now effectively "free" ? i.e. all debt has been repaid with the proceeds? How did they work out the €9M?

[topvest] 28/7/2015 07:26

Yes, but a rubbish RNS. No separate valuation of Fokker in the accounts. No mention how the disposal compares with the book value or original cost, albeit it is almost certainly well below original cost and possibly below the Dec 2014 valuation. Getting frustrated with how they are running CDI!

[rcturner2] 28/7/2015 07:17

About 30p a share in cash coming as a result of the divestment.

[n0rbie] 28/7/2015 07:12

Ah here it is

[n0rbie] 28/7/2015 07:11

£499M sale achieved of Fokker, part of Stork BV. No RNS here?!

GKN PLC
Acquisition(s)
GKN agrees to acquire Fokker Technologies for €706 million
GKN plc (“GKN”) today announces that it has agreed to acquire Fokker Technologies Group B.V. (“Fokker”) from Arle Capital (“Arle”) for an enterprise value of €706 million (£499 million), (the “Transaction”). Fokker is a specialist tier one aerospace supplier in aerostructures, electrical wiring systems, landing gear and associated services, across commercial, military and business jet end markets. Its headquarters are in the Netherlands.

[tiltonboy] 16/7/2015 16:59

Somebody is being a bit naughty if they have something to declare!

[skyship] 16/7/2015 16:03

n0rbie & Tilts...

Re my statement back on 30th June:

"The institutional seller doesn't have to declare his sale until he has finished."

Surely if they had to make a Statement when passing down through a %age point, the seller would now be revealed. Haven't seen anything yet!

[felix99] 14/7/2015 12:46

yes of course there is currency risk in there but the debt figures are more recent . Once the US facility repaid that just leaves us with euro risk and euro investments. Just need a strong pound against dollar to reduce tht loan in sterling terms ........

[rcturner2] 14/7/2015 10:33

"On a rolling Last Twelve Months, or 'LTM', basis for the twelve months to 31
March 2015, the portfolio comprising Stork BV, Parques Reunidos, Technogym and
Hilding Anders but excluding Expro performed strongly with combined revenue
growth of 5.6% and earnings of 14.0% compared to the twelve months to 31 March
2014."

[rcturner2] 14/7/2015 10:32

Also, don't forget the recent trading statement that gave quite good reports for the non-Expro businesses.

[jgh03] 14/7/2015 10:29

Felix99 - a useful analysis. Does it need to take account of Sterling's 10% appreciation against the Euro over the 6 months from 31 Dec 14 ?

[felix99] 14/7/2015 09:56

It has a minimum interest period of 1.15 years even if pay loan back within 12 months. that effectively includes the arrangement fee so the lender has a guaranteed minimum return for providing the loan. (upto 19.4m Euro)

Otherwise its a minimum term of 2.75 years of interest.

CDI mkt cap is circa £61m - £2.81 per share

Value of portfolio at 31 Dec 14 was 545p per share = approx. £118m .

Expro £42m
Parques Reunidos £40m
Stork BV £31m
Technogym £17m
Hilding anders £5m


Ok so Expro worth less but at 31/12/14 oil prices had already crumbled and £30m was written off the value at 31/12/14 already - almost halved. So to me not too much more to write off there.

Parques Reunidos probably worth same or more ( nothing in Greece by the way) .

Stork Areospace and defence was written down slightly but probably still valued at that and Technogym the same.

So all in all I don't see such massive adjustments to NAV from the £5.45 per share of Dec 14.

Add to that these valuations in the books are conservative I would say that generally when sold at the right time they will get more than book value not less.


The only problem was a fire sale to repay the $50m US notes in Dec 15 . They hold cash of £25m or so - so they need circa £32m to pay off the US notes ( approx. 45m euro of the 52m euro facility.

So lets say the investments are worth £100m worst case to £150m best case if sales are timed well.

If they sell nothing between now and December they need to draw down 45m euro.

That will cost 19.4m @ 1.15 years minimum 3m euro ( assuming they pay back in 12 months which should be easily done from sale of any of big 3)

The excess over that is 26m euro at minimum 2.75 years which is 9.3m euro

So total cost is 12.3m euro but for that you have 2.75 years to realise the portfolio and get the £50m extra top whack imho so whilst its not cheap its a small price for shareholders to pay to buy nearly 3 years to wait for best prices to sell the stakes.

Bit of a no brainer to me for a 12-24 month hold to double your money unless you think the world mkts are going to freeze up and crash .

[skyship] 14/7/2015 08:24

Presumably upon drawdown specifically to replace the existing US notes.