AlphaValue Corporate Services
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Bloomberg   ALDOL FP
Engineering-Heavy Constr.  /  France  Web Site   |   Investors Relation
Acquisitions and new management ensure growth but financing still a headache
Upside 25.1%
Price (€) 0.00
Market Cap (€M) 9.63
Perf. 1W: -9.09%
Perf. 1M: 66.7%
Perf. 3M: 25.0%
Perf Ytd: 100%
10 day relative perf. to stoxx600: 42.9%
20 day relative perf. to stoxx600: 63.0%
Earnings/sales releases29/05/2023

Battered Dolfines illuminates a future path with the HSE acquisition

After a long period of searching for another profitable acquisition, Dolfines decided to expand its footprint in the Health, Safety and Environment market and buy out AEGIDE International, which has more than 200 clients across the world. In FY22, the acquired company generated turnover of €2.75m, and had averaged 15% annual growth over the last three years. In our view, the acquisition enhances Dolfines’ opportunities and sheds some light on the future path of the company.


• Dolfines, the French micro-cap oil field and renewable energy service company, has completed the acquisition of AEGIDE International ― the Health, Safety and Environment (HSE) services company with more than 200 clients in several industries.
• The independent consultancy valued AI at €1.901m.
Dolfines will pay 70% of the acquisition with cash and the rest will be financed by the issuance of 110.3m shares.
• AEGIDE Chairman Adrien-Bourdon-Feniou, who is also the son of Dolfines Chairman Jean-Claude Bourdon, will have an 18% stake in Dolfines.
• In FY22, AEGIDE International booked €2.75 in revenues – representing an average 15% annual growth rate over the last 3 years. The EBITDA margin was 9% over the same period.
• As part of a previous financing scheme for acquisitions, Dolfines raised €2m by issuing 800 convertible bonds with warrants (OCABSA: obligations convertibles en actions assorties de bons de souscription d’actions).
• The conversion of the bonds during February – March led to the creation of an additional 200m shares.


Business diversification with profitable acquisitions continues at a cost
Following the successful acquisition of France 8.2, which now regroups the renewable energy business of Dolfines and accounted for 40% of FY22 turnover (€3.1m in revenues), Dolfines had targeted business areas with significant growth potential. An acquisition in the Health, Safety and Environment (HSE) market seemed ideal as the sector is enjoying diversification with the accelerating energy transition.

AEGIDE International, a leading expert in the HSE market with a 30-year track record, emerged as an attractive opportunity given that the acquisition would be cash accretive and align with Dolfines’ strategy.

Dolfines already has experience of the HSE market with rig audits on O&G platforms and the new company will further expand its footprint in this growing market.

The HSE market is estimated to have been worth around $6.7 billion in 2022 and is expected to grow at an average annual rate of 7.5% over the next few years, propelled by the growing importance of ESG criteria, investor pressure and regulatory changes. AEGIDE thus brings fresh air to Dolfines and will contribute to profitability. The opportunities are reflected in AEGIDE’s 15% revenue CAGR over the last three years – a figure that is impressive for the service and engineering companies. Further, the new accretive acquisition could potentially increase FY24 revenues by 25-30%.

The acquisition will also bring geographical complementarity across Europe, Africa and the Middle East, and a strong presence in Brazil.

The financial details of the acquisition reveal a €1.901m valuation for the company. Dolfines will pay 70% in cash and 30% will be financed through the issuance of 110.3m shares. Accordingly, the total number of shares for the market cap will rise to above 594 million.

The news should have been welcomed by the market. The risky equity line financing however increased the downward pressure on the share price, which has tanked by 45% since the announcement of the acquisition in February 2023. Note that a significant part of the selling pressure was probably triggered by Negma – the debt and equity financing group behind Dolfines’ convertible bonds.

Future path clears
While the recent acquisition targets expansion in growing markets and increases cash flow, it also brings another strategic dimension in terms of determining Dolfines’ future direction.

AEGIDE International Chairman Adrien Bourdon-Feniou is the son of Dolfines Chairman Jean-Claude Bourdon and will own an 18% stake in Dolfines once the acquisition is completed. This could be a hard sell to investors at the general shareholders meeting in June and they could ask for an independent assessment of the acquisition. The KPIs and growth trajectory for AEGIDE should however help to assuage short-term investor worries.

At the June meeting, we expect sweeping changes in the company’s governance. A new board could be on the horizon, set to accelerate Dolfines transformation to a more dynamic service company with discipline.

One thing that does need to be clarified for shareholders: whether Negma has sold all the shares it had through convertible bonds. If not, what is likely to be its strategy regarding Dolfines? Shareholders have taken a huge hit due to the repercussions of the equity financing since 2022 as Negma dumped a significant number of shares after conversion.


Our model is under review to integrate the new acquisition into the FY24 figures in particular.