AlphaValue Corporate Services
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IDI

CR
Bloomberg   IDIP FP
Holding Companies  /  France  Web Site   |   Investors Relation
Private equity players buffeted by macro-economic headwinds
Target
Upside 46.6%
Price (€) 67
Market Cap (€M) 485
Perf. 1W: 0.30%
Perf. 1M: 0.30%
Perf. 3M: 2.45%
Perf Ytd: -0.59%
10 day relative perf. to stoxx600: -0.31%
20 day relative perf. to stoxx600: -1.92%
Earnings/sales releases28/11/2023

Ending Q3 with firepower at its peak

IDI enjoyed another active quarter. Although the NAV has fallen slightly qoq (-0.9%) since June 30, 2023 (note that only the liquid assets and listed securities were revalued), it has nevertheless risen by 11.4% YTD for the first 9 months of 2023, reflecting the strength of IDI’s business model. 2023 is proving to be a banner year for IDI, which has completed a number of structuring transactions, including the creation of a third-party asset management business via iIdiCo, and the sale of Flex Composite Group to Michelin at a stellar cash-on-cash multiple of 12x. With investment capacity at record levels, IDI is in a prime position going forward.


Fact

  • IDI’s NAV came to €724.5m (or €96.85 per share) as of September 2023 corresponding to a c.0.9% decrease qoq, although only the liquid assets and listed securities were revalued. YTD, the NAV increased by 11.4%.
  • IDI, alongside Andera Partners, has announced that it completed the sale of Flex Composite Group, in which the initial investment was €23.2m in 2015, for an enterprise value of €700m, representing 12x the initial investment or an IRR of 38%, on 27 September 2023.
  • As of September 2023, IDI has an investment capacity net of debt of €325m, compared with €74.1m at the end of H1-23.
  • Over the quarter, IDI announced 4 deals including 1 acquisition, 1 divestment and 2 build-ups.

Analysis

Significant growth in the NAV YTD

This morning, IDI published its NAV as of September 2023. Although the NAV declined slightly by 0.9% qoq from €730.7m (€97.73 per share) to €724.5m (or €96.85 per share), investors have no reason to worry about NAV progression over 2023, all the more so in that only the active liquid assets and listed securities were revalued during the third quarter. 2023 augurs well for NAV growth reaching 11.4% YTD.

Still no fragility amidst the adverse market conditions

While the main private equity players continue to suffer from the difficult environment in terms of both financing and deal flow, IDI shows no signs of fragility in its portfolio rotation. YTD, IDI has completed 14 deals, including 5 disposals, 4 external growth transactions and 5 acquisitions. Among IDI’s most notable transactions were the completion of the acquisition of 40% of Omnes’ energy transition and innovation activities, the creation of IdiCo, and the sale of Flex Composite Group to Michelin for an EV of €700m, i.e. 12x its initial investment and an IRR of 38%, completed on 27 September 2023. In addition to these transactions, IDI also saw (i) the disposal and subsequent reinvestment in Freeland, (ii) the investment in the major European player in the hybrid turf market, Natural Grass and (iii) the disposal of Fidinav, a group specialising in the maritime transportation of dry bulk, for an IRR of 6%.

With 2023 already well underway for IDI, the third quarter saw four new transactions, including (i) IDI’s acquisition of a majority stake (c.90%) in Prevost Laboratory Concept, a laboratory and manufacturer (CDMO) of cosmetics products and food supplements, (ii) the sale of VOIP, a BtoB telecoms operator, and (iii) two external growth transactions for Group Positive and CDS Groupe.

Strong firepower following the sale of FCG

Following the sale of FCG, IDI has substantially improved its investment capacity net of debt, rising from €74.1m in H1-23 to €325m in September 2023, which should enable it to sustain its strong investment momentum and seize opportunities in 2024.

We reiterate our views expressed at the H1-2023 stage: IDI’s buoyant investment activity at a time when the private equity landscape had been expected to be hit by the slowdown in deal flow and cutbacks in financing, makes IDI a compelling long-term play.


Impact

This release should not have a material impact on our estimates.


Updates

28 Nov 23 Earnings/sales releases
Ending Q3 with firepower at its peak

28 Sep 23 M&A /Corp. Action
Masters the value creation playbook

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13 Apr 23 Earnings/sales releases
FY22: IDI in a solid stand amidst an adverse en...

14 Sep 22 Earnings/sales releases
H1 22: a new milestone for IDI

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