EURAZEO (EPA:RF) - EURAZEO COMPLETES STRATEGIC INVESTMENT IN RHÔNE

Transparency directive : regulatory news

20/04/2018 18:14

PARIS, APRIL 20, 2018

EURAZEO COMPLETES STRATEGIC INVESTMENT IN RHÔNE

PRESS RELEASE PREPARED IN ACCORDANCE WITH ARTICLE 17 OF THE RECOMMENDATION NO.
2016-04 OF THE AUTORITÉ DES MARCHÉS FINANCIERS(1)

* EURAZEO COMPLETES ACQUISITION OF A 30% STRATEGIC INTEREST IN RHÔNE
* RHÔNE PARTNERS BECOME EURAZEO SHAREHOLDERS, TOGETHER HOLDING APPROXIMATELY
  2.7% OF THE SHARE CAPITAL
* EURAZEO AND RHÔNE PARTNERS ENTER INTO A GOVERNANCE AGREEMENT

Eurazeo, a listed investment company operating in Europe and North America,
announced today the completion of the acquisition of a 30% interest in Rhône,
a global alternative investment management firm with over EUR5 billion in
assets under management across both its private equity business and its real
estate joint venture with WeWork, the global leader in the collaborative
workspace industry.

This transaction is highly accretive to Eurazeo as it (i) strengthens Eurazeo
transatlantic presence in the upper-mid to large cap buyout space and
prime-asset Real Estate industry, (ii) enriches Eurazeo's business network in
the United States and lastly (iii) enlarges Eurazeo's coverage of blue- chip
addressable Limited Partners on a global scale. Further to this transaction
Eurazeo, collectively with its affiliates, will have assets under management in
excess of EUR15 billion (including AUM from recently acquired private equity
platform Idinvest Partners).

Under the terms of the agreement entered into on November 28, 2017 among
Rhône, its partners and Eurazeo, Rhône partners and Eurazeo agreed to the
acquisition by Eurazeo of a 30% interest in Rhône Group L.L.C. and Rhône
Capital L.L.C. (together, "Rhône"), through Alpine NewCo, Inc., a Delaware
corporation created for the purposes of the transaction, in exchange for inter
alia $100 million in cash and 2 million newly issued Eurazeo shares.

The issuance by Eurazeo of 2 million shares results from the contribution in
kind (apport en nature within the meaning of Article L. 225-147 of the French
Commercial Code) by Rhône partners of 100% of the share capital of Alpine
NewCo, Inc., which held at the closing of the Contribution a portion of the 30%
interest in Rhône Group L.L.C. (the "Contribution").

In accordance with Article L. 225-147 of the French Commercial Code, and
pursuant to the authorization granted to the Executive Board (Directoire) by
the twentieth resolution of Eurazeo's shareholders' meeting of May 12, 2016,
Eurazeo's Executive Board (Directoire) approved today the Contribution and the
resulting share capital increase following the delivery by the appraisers
(commissaires aux apports) of their reports on the valuation of the contributed
assets and on the fairness of the exchange ratio.

(1) No prospectus has been and will be submitted to the review and/or clearance
of the French Autorité des marchés financiers in connection with the
Contribution given that less than 10% of Eurazeo shares have been admitted to
trading on the regulated market of Euronext Paris over the last twelve months.

As a result, Rhône partners together hold upon completion of the Contribution
2.69% of Eurazeo's share capital and 2.33% of its voting rights.(2) In
addition, Eurazeo and Rhône partners entered today into a governance agreement
which in particular provides for certain representation rights of Rhône
partners in Eurazeo, as well as standstill, lock-up and transfer restrictions
on the Eurazeo shares so issued to Rhône partners. The AMF will publish a
summary of the main terms of this governance agreement in accordance with
applicable laws. Mr. Robert Agostinelli (Rhône Group Managing Director and
co-Founder) will be proposed to serve as an observer on the Eurazeo Supervisory
Board at Eurazeo's next Combined General Meeting on April 25th, 2018. However,
each firm will continue to operate independently and will maintain full
discretion over its investment decisions.

In addition, Eurazeo benefits from certain minority governance rights in Rhône
(three Eurazeo representatives will be appointed at Rhône's Board of Managers)
and its interest is also subject to certain transfer restrictions and other
specific provisions (including, a liquidity right and an obligation to exit
upon the occurrence of certain events).

The main characteristics of the Contribution, its valuation and its
consideration are described below.

Contributors:

11 Rhône partners (the "Contributors")

Beneficiary:

Eurazeo, a société européenne incorporated under the laws of France,
registered with the Trade and Companies Registry of Paris under identification
number 692 030 992 R.C.S. Paris, with a share capital of EUR220,561,157 (before
the closing of the Contribution), whose registered office is located at 1, rue
Georges Berger, 75017 Paris, France ("Eurazeo")

TERMS AND CONDITIONS OF THE CONTRIBUTION

Contributed Shares:

A total of 1,000 shares of common stock with a par value of $0.01 issued by
Alpine NewCo, Inc., a corporation incorporated under the laws of Delaware,
under file number 6633182, with an authorized share capital of $10, whose
registered office is located at 251 Little Falls Drive, Wilmington, New Castle
County, Delaware 19808, United States (the "Alpine NewCo Shares"). At the
closing of the Contribution, Alpine Newco held a 25.50% ownership interest in
Rhône Group L.L.C. Immediately after the closing of the Contribution, Eurazeo
acquired in cash, inter alia, the remaining portion of the 30% ownership
interest in Rhône Group L.L.C. through Alpine NewCo.

Total Value of the Contributed Shares:

The Alpine NewCo Shares were valued based on a multi-criteria valuation
approach, which takes into consideration a number of relevant valuation methods
generally used in the valuation of companies carrying out business activities
similar to Rhône Group L.L.C., i.e., (i) Alternative Asset Management
Companies, and (ii) Real Estate Investment Companies.

Alpine NewCo holding a 25.50% ownership interest in Rhône Group L.L.C. (at the
closing of the Contribution) was valued in the aggregate at EUR148,310,280 for
the purposes of the Contribution.

Number of Eurazeo Shares Issued in Consideration for the Contribution:

In consideration for the Contribution, Eurazeo issued 2,000,000 Eurazeo
ordinary shares of category A (the "New Eurazeo Shares"), representing in the
aggregate a share capital increase of EUR6,100,000 (nominal value).

(2) On the basis of the number of shares and theoretical voting rights of
Eurazeo as of March 31, 2018 as adjusted to account for the transaction
(74,315,130 shares and 85,728,501 voting rights (including treasury shares)).

Rights Attached to the Eurazeo Shares Issued In Consideration for the
Contribution:

The New Eurazeo Shares are treated as existing Eurazeo ordinary shares of
category A and carry the same rights and obligations; therefore, they carry the
right to any dividend and/or distribution declared or paid after the closing of
the Contribution.

Share Capital Premium (prime d'apport):

The difference between the total value of the Contribution, i.e.,
EUR148,310,280, and the nominal amount of the share capital increase, i.e.,
EUR6,100,000, shall constitute a share capital premium (prime d'apport)
resulting from the Contribution of EUR142,210,280 euros.

The share capital premium (prime d'apport) will be adjusted (as the case may be
to deduct expenses related to the Contribution and where applicable, to bring
Eurazeo's legal reserve to the legal minimum following the Contribution) and
allocated as determined by Eurazeo's Executive Board (Directoire) in accordance
with applicable laws.

Date of the Contribution:

The New Eurazeo Shares were issued on the date hereof upon the decision of the
Executive Board (Directoire) to approve inter alia the Contribution and the
resulting share capital increase, pursuant to the authorization granted to the
Executive Board (Directoire) by the twentieth resolution of Eurazeo's
shareholders' meeting of May 12, 2016.

Independent Appraisal:

By order dated December 21, 2017, the President of the Commercial Court of
Paris appointed Agnès Piniot (8 rue Halevy, 75009 Paris, France) and Jacques
Potdevin (7 rue Galilée, 75116 Paris, France) as appraisers (Commissaires aux
apports) for the preparation of the reports referred to in Articles L. 225-147
and R. 225-8 of the French Commercial Code and in the recommendation No.
2011-11 of the Autorité des marchés financiers dated July 21, 2011.

Regarding the value of the Contribution, they concluded that:

"On the basis of our work and as of the date of this report, considering the
satisfaction of the conditions precedent that are material for the reality and
valuation of the contribution (§ 3.3), we are of the opinion that the total
value of the contribution, amounting to EUR148,310,280, is not overstated and
therefore, that it is at least equal to the nominal amount of the share capital
increase of the beneficiary entity plus the share capital premium (prime
d'apport)."

Regarding the consideration of the Contribution, they concluded that: "On the
basis of our work, as of the date of this report, considering the satisfaction
of the conditions precedent that are material for the reality and valuation of
the contribution (§ 3.4), we are of the opinion that the consideration for the
contribution of the Alpine NewCo shares determined by the parties and resulting
in the issuance of 2,000,000 Eurazeo shares is fair."

Their reports have been made publicly available in accordance with French law
and are available on Eurazeo's website (www.eurazeo.com).

CONSEQUENCES OF THE CONTRIBUTION

Eurazeo's Share Capital After the Contribution:

Upon completion of the Contribution, Eurazeo's share capital amounts to
EUR226,661,157 (divided in 74,315,130 shares).

Dilution:

Based on a share capital composed of 72,315,130 shares and 83,728,501
theoretical voting rights as of March 31, 2018, a shareholder holding 1% of
Eurazeo's share capital and 1% of Eurazeo's theoretical voting rights prior to
the issuance of the New Eurazeo Shares has seen his/her/its shareholding
reduced to approximately 0.97% of Eurazeo's share capital and 0.98% of
Eurazeo's theoretical voting rights as a result of the Contribution.

Notes to the Editor

About Rhône

> Rhône was founded in 1996 by Robert F. Agostinelli and M. Steven Langman
following their successful careers in cross-border mergers and acquisitions
with Goldman Sachs and Lazard. With over 20 years of investing experience,
Rhône comprises a global alternative investment management firm with over EUR5
billion in assets under management, including its real estate joint venture
with WeWork. The firm focuses its private equity investments in market leading
businesses with a pan-European or transatlantic presence and global growth
opportunities. Rhône, which is currently investing capital from its fifth
private equity fund, has invested in a diversified portfolio of companies
including those in the chemical, consumer product, food, packaging,
industrials, specialty material, business services, and transportation sectors.
In addition, the firm has a joint venture with WeWork to acquire real estate
and real estate related assets that are suitable for WeWork.

About Eurazeo

> With a diversified portfolio of approximately EUR15 billion in assets under
management(1), including EUR9 billion from third parties, Eurazeo is a leading
global investment company with offices in Paris and Luxembourg, New York,
Shanghai and Sao Paulo. Its purpose and mission is to identify, accelerate and
enhance the transformation potential of the companies in which it invests. The
firm covers most private equity segments through its five business divisions -
Eurazeo Capital, Eurazeo Croissance, Eurazeo PME, Eurazeo Patrimoine and
Eurazeo Brands - and its Idinvest business divisions. Its solid institutional
and family shareholder base, robust financial structure free of structural
debt, and flexible investment horizon enable Eurazeo to support its companies
over the long term. As a global long-term shareholder, the firm offers deep
sector expertise, a gateway to global markets, and a stable foothold for
transformational growth to the companies it supports.

(1) pro forma of Idinvest and Rhône

> Eurazeo is listed on Euronext Paris.
> ISIN: FR0000121121 - Bloomberg: RF FP - Reuters: EURA.PA

   For more information, please visit the Group's web site: www.eurazeo.com

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