AlphaValue Corporate Services
This research has been commissioned and paid for by the company and is deemed to constitute an acceptable minor non-monetary benefit as defined in MiFID II

IDI

CR
Bloomberg   IDIP FP
Holding Companies  /  France  Web Site   |   Investors Relation
A challenging environment for private equity after a record year
Target
Upside 65.7%
Price (€) 46.5
Market Cap (€M) 337
Debt

IDI exemplifies a conservative approach to leverage, a rarity among private equity peers, by not recurring to debt at the holding company level in order to fund its acquisitions. It also monitors judiciously the leverage ratios of its portfolio companies, standing at a prudent 2.6x net debt/EBITDA at the close of 2020, compared to an average of 5.8x for European PE-sponsored deals last year. It is important to note that, even in the case that one of the participations runs into difficulties, the holdings are siloed so as to not impact any of the other assets nor IDI itself.

The company made use of a single €15m credit facility at the end of 2020. Overall, gross debt on the consolidated accounts amounted to €86.1m at the end of June 2021 (it stood at €129.5m at close of 2020), but this mainly corresponds to intra-group current accounts and a small portion in uncalled capital commitments on the IDI Emerging Markets funds. IDI maintains a net cash position, and held €184.5m in cash and liquid assets in H1 21, increasing from €123m in December 2020.

As part of its investment strategy, IDI maintains a healthy level of liquid assets as a percentage of the total portfolio, averaging c.20% historically (23% in 2020, down from 27% in 2019).

Funding - Liquidity
  12/21A 12/22E 12/23E 12/24E
EBITDA €th -29,218 -29,802 -30,696 -31,310
Funds from operations (FFO) €th -33,610 -30,480 -31,390 -32,036
Ordinary shareholders' equity €th 612,432 567,828 525,427 475,646
Gross debt €th 87,306 87,306 87,306 87,306
   o/w Less than 1 year - Gross debt €th 45,541 45,541 45,541 45,541
   o/w 1 to 5 year - Gross debt €th 41,765 41,765 41,765 41,765
 + Gross Cash €th 143,693 94,951 23,672 -52,213
 = Net debt / (cash) €th -56,387 -7,645 63,634 139,519
Bank borrowings €th 87,306 87,306 87,306 87,306
Other financing €th 0.00 0.00 0.00 0.00
Gearing (at book value) % -5.34 -5.64 5.33 21.4
Equity/Total asset (%) % 107 98.1 86.4 75.0
Adj. Net debt/EBITDA(R) x 1.93 0.26 -2.07 -4.46
Adjusted Gross Debt/EBITDA(R) x -3.13 -3.06 -2.98 -2.92
Adj. gross debt/(Adj. gross debt+Equity) % 13.0 13.8 14.8 16.1
Ebit cover x -61.8 -60.2 -62.1 -61.3
FFO/Gross Debt % -36.7 -33.4 -34.4 -35.0
FFO/Net debt % 59.6 399 -49.3 -23.0
FCF/Adj. gross debt (%) % -31.2 -21.5 -33.4 -29.3
(Gross cash+ "cash" FCF+undrawn)/ST debt x 2.53 1.65 -0.15 -1.74
"Cash" FCF/ST debt x -0.64 -0.43 -0.67 -0.59
Credit Risk
Covenants
Changes to Story : 06/09/2022, Changes to Forecasts : 06/09/2022.