Strategic orientation 2017-20
Wendel’s first and foremost objective is to create value by developing assets over the long term, by actively encouraging companies to make investments that drive organic growth and profitability and by providing support for their acquisitions. At the end of 2016, Wendel announced its strategic orientation for 2017-2020.
Continued value creation, based on
- Ambitious and attentive development of the companies of the Group;
- Diversified investments that capture long-term trends;
- The increased internationalization of our companies, teams and partners;
- An optimized financial structure with less than €2.5 billion in net debt.
Clear and quantified orientation
- Wendel could invest €3 bn total equity between 2017 and 2020, depending on markets conditions, in Europe, Africa and North America in companies exposed to long-term trends. Part of this amount could derive from partners who share our investment philosophy, as we have done in the past;
- Building a portfolio of with around 50% unlisted assets;
- €200-500 million in Wendel equity per transaction in Europe and North America, €50-200 million in Oranje-Nassau Développement equity per transaction in Africa;
- Double-digit average total shareholder return, with dividend increases year after year consistent with our TSR target, and with share buybacks regularly, depending on opportunities.
Wendel - Long-term investor
Wendel invests for the long term as the majority or leading shareholder in mainly unlisted companies that are leaders in their markets, in order to boost their growth and development.
The Wendel Group has an investment model chiefly focused on companies with a majority of the following characteristics:
- located in countries that are well known to Wendel, based particularly in Europe, North America or new economies, with partners who already have a strong presence there;
- strong international exposure;
- led by highly-skilled management teams;
- first or second in their market;
- operating in sectors with high barriers to entry;
- sound fundamentals and, in particular, recurrent and predictable cash flows;
- offering high potential for long-term profitable growth, both organically and through accretive acquisitions;
- significant exposure to markets undergoing rapid growth and/or major, long-term economic trends.
As a long-term shareholder, Wendel particularly favors certain circumstances, such as:
- control or joint control immediately or in phases;
- a need for a long-term, principal shareholder;
- opportunities for further reinvestment over time to accompany organic or external growth.
Wendel does not invest in sectors whose reputation would be detrimental to its image or values.
In early 2011, Wendel set up an organization to seize opportunities for growth, diversification or innovation.
Oranje-Nassau Développement makes investments of smaller individual amounts than those made directly by Wendel. Oranje-Nassau Développement has been very active since its creation: for total invested equity of about €760 million, it has acquired Parcours, an independent specialist in long-term vehicle leasing to corporate customers; Mecatherm, the world leader in equipment for industrial bakeries; Nippon Oil Pump, Japan’s leading manufacturer of trochoid pumps and hydraulic motors; and CSP Technologies, a company specialized in high-performance plastic packaging. It has also invested in exceet, the European leader in embedded intelligent electronic systems and in Saham Group, a major pan-African provider in insurance, healthcare and customer service centers. Once the invested amount reaches €200 million, the company is included among Wendel’s main investments, as was the case with IHS in early 2014.
Acquisitions by Group companies
Growth by acquisition is an integral part of the development model of Wendel Group companies. Our companies plan to achieve a non-negligible share of their growth through acquisitions, focusing on small or medium-sized purchases, which create the most value. Wendel’s teams assist Group companies in their search for accretive acquisitions, in deploying their external growth strategy and in arranging the required financing.
Our entrepreneurial model
Wendel has set up co-investment systems to allow its principal managers to invest their personal funds in the same assets in which the Group invests and be involved in the creation of value in the Group. This gives executives a personal stake in the risks and rewards of these investments. Various mechanisms also exist to allow senior managers to participate in the performance of each entity. For listed subsidiaries and associates (Bureau Veritas, Saint-Gobain), these mechanisms consist of stock-option and/or bonus share plans. For unlisted subsidiaries (Cromology, Mecatherm, Stahl, IHS, NOP, CSP Technologies, Constantia Flexibles and Allied Universal), the participation policy is based on a co-investment mechanism through which these executives may invest significant sums alongside Wendel.
developing companies over the long term to help them become leaders
Wendel partners with companies for the long run, such as with Capgemini or BioMérieux. Although it may hold an investment for a shorter period, Wendel always makes decisions with the company’s enduring interests in mind. Wendel supports acquisitions and capital expenditure, keeping a constant focus on innovation.
CAPGEMINI : 1982-2006
- Held for 24 years
- Became a world leader in consulting and IT services
- Sales increased 45-fold
- IPO in 1985
- Investment multiple: 1.5x
- Amount invested by Wendel: €1,290 million
BIOMÉRIEUX : 1988-2007
- Held for 19 years
- Became a global player in in vitro diagnostics; world leader in clinical and industrial microbiology
- Margin improved by 330 points over the 2003-2007 period
- IPO in 2004
- Investment multiple: 4.4x
- Amount invested by Wendel: €106 million
EDITIS : 2004-2008
- Held for 4 years
- Margin improved by 400 points over the period
- 6 acquisitions
- Sold to a publishing industry player, Spanish group Planeta
- Investment multiple: 2.7x
- Amount invested by Wendel: €183 million
STALLERGENES : 1993-2010
- Held for 17 years
- Became the world leader in allergy immunotherapy
- Sales increased 10-fold
- Sold to a highly specialized family-held investment company (Ares Life Sciences, founded by the Bertarelli family)
- Investment multiple: 35x
- Amount invested by Wendel: €12 million
DEUTSCH : 2006-2012
- Held for 6 years
- Continued support of innovation in a difficult economic environment
- Margin improved by 500 points over the period
- Sold to the industry world leader, TE Connectivity
- Investment multiple: 2.5x
- Amount invested by Wendel: €388 million
LEGRAND : 2002-2013
- Held for 11 years
- Global specialist in electrical and digital building infrastructures
- 2002-2012: revenues increased by more than 55%
- Over 30 acquisitions
- Relisted on the stock exchange in 2006
- Investment multiple: 3.9x
- Amount invested by Wendel: €659 million