Logistics Development invests EUR 18.5m in Synsion, plans buyback
Logistics Development Group announced an investment of €18.5m (£15.9m) into Synsion TopCo on Thursday, as well as its intention to buy back up to 20% of its issued share capital.
The AIM-traded firm said Synsion holds a group of companies formed by its investment manager Dbay Advisors specifically to invest in SQLI - a pan-European “digital transformation” business.
It said the Synsion Group is controlled by funds discretionarily managed by Dbay, and currently holds 72.3% of SQLI following a number of historical investments culminating in a tender offer to SQLI shareholders, announced in September last year.
The investment would be used by the Synsion Group to acquire an additional stake in SQLI at €44.25 per share, and was expected to increase the Synsion Group's holding in SQLI by 9%, to 81.3%.
LDG's investment into Synsion Topco would initially be made through an €18.5m loan, which would be converted into an 11.1% equity interest, corresponding to a see-through stake in SQLI of about 9% in due course.
Synsion Topco's management accounts from incorporation in July 2021 to 31 December 2021 reported unaudited net assets of €40.6m, and net losses of €0.28m.
“SQLI, listed on the Euronext Paris, is a pan-European digital transformation business with a leading position in the fast-growing ecommerce/omnichannel integration space,” the board said in its statement.
“SQLI is headquartered in Paris and has more than 2,100 employees in over 13 countries, including over 600 in its offshoring delivery centre in Morocco.”
The company's blue-chip clients include LVMH, Airbus, Nestle, Carlsberg, L'Oreal, Bridgestone, Adidas and Generali.
For the year ended 31 December, SQLI reported revenues of €225.4m, EBITDA pre-IFRS 16 of €15.2m, net assets of €100.9m, and net profits of €5.3m.
In the six months ended 30 June this year, SQLI reported revenues of €124.5m, up 9.4% year-on-year, and pre-IFRS 16 EBITDA of €12.1m, up €4.1m over the first half of 2021.
Additionally, LDG said that after completing its share buyback announced in January, it had made a number of new investments, but trading in its shares had returned to a level that represented a “significant discount” to its net asset value per share.
“Accordingly, the company intends to seek shareholder authority to acquire additional ordinary shares in the market, up to an amount representing approximately 20% of the company's issued share capital, which the board believes may serve to reduce the observed discount to net asset value per ordinary share.
“The board expects to limit the total consideration for the further share buyback to £15m.”
LDG said it believed the further buyback could also provide an exit opportunity for any shareholders who did not wish to retain their investment.
“Shareholders should note, however, that there is no guarantee that the proposed further share buyback, if implemented, will either eliminate or reduce the observed discount to net asset value per ordinary share, nor that any shareholders wishing to do so will be able to exit their investment in the company in full under the further share buyback.”
At 1208 GMT, shares in Logistics Development Group were up 5.2% at 13.47p.
Reporting by Josh White for Sharecast.com.