The Executive Board roadmap for the next four years will be focused on diversifying Wendel’s portfolio with balanced exposure to listed and unlisted companies by generally deploying capital towards higher-growth markets, while retaining a dose of opportunism.
Wendel aims at building a portfolio of 7 to 10 companies, with new investments focused on Western Europe, particularly France, and North America as well as on improving ESG profiles.
Standalone equity investments should amount to c. €150 million to €500 million targeting majority/control/large minority investments in listed or unlisted companies. Wendel also contemplates investments in small equity growth opportunities.
Wendel will pursue its long-term shareholder approach, with the objective to be a top shareholder with board and critical committee seats, alongside like-minded partners.
In terms of sectorial approach, Wendel seeks market leading business or growing sectors with long-term growth prospects and pricing power. Wendel would generally avoid high cyclicality or capital-intensive assets and look for companies with a demonstrated resilience through economic cycles (and pandemic). Attractive sectors meeting those criteria include technology services and software, business services, healthcare and industrial technology. Nevertheless, Wendel remains opportunistic and would contemplate situations in different industries that otherwise meet its criteria.
As part of its ESG commitment and recent roadmap published in 2020, Wendel will consider assets that have a positive impact on society.
Wendel’s permanent capital enables it to invest for the long term as the majority or leading shareholder in 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 as many of the following characteristics as possible:
- companies which embody Wendel’s ESG values and ethics;
- business activities relating to one or more major, long-term economic trends, enabling Wendel to plan to hold the investment over the long term, even going beyond 15 to 20 years in certain cases;
- located in countries that are well known to Wendel: in Europe, particularly in France and North America (United States and Canada);
- with strong international exposure or an international growth strategy;
- ideally representing an initial investment generally between €150 and €500 million; Smaller equity investments are also contemplated directly or indirectly, notably through Wendel Lab;
- led by high-quality, experienced management teams with which Wendel shares a common vision;
- among the leaders in their markets;
- operating in sectors with high barriers to entry;
- sound fundamentals and, in particular, recurrent and predictable cash flows;
- and offering high potential for long-term profitable growth, through both organic growth and accretive acquisitions.
Wendel will pursue its long-term shareholder approach, with the objective to be a top shareholder with board and critical committee seats, alongside like-minded partners. Wendel particularly favors certain circumstances, such as:
- control or joint control immediately or in phases;
- a need for a long-term, reference shareholder;
- opportunities for further reinvestment over time to accompany organic or external growth.
Acquisitions by Group companies
Growth by acquisition is an integral part of the development model of Wendel Group companies. While external growth projects have slowed down in 2020 primarily due to the Covid-19 crisis, the pipeline of opportunies remain healthy and our companies plan to achieve a portion 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 acquisitions that can create value, in deploying their external growth strategy, and in arranging the required financing.
An entrepreneurial model
Wendel believes in the efficacy of giving management teams a financial interest in value creation. This gives the executives a personal stake in the risks and rewards of these investments.
For listed subsidiaries and associates (Bureau Veritas), these mechanisms consist of stock-option and/or bonus share plans.
For unlisted subsidiaries (Cromology, Stahl, IHS Towers, Constantia Flexibles and CPI), the participation policy is based on a co-investment mechanism through which executives may make significant personal investments alongside Wendel.
Success Stories : developing companies
over the long term to help 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
Stallergènes : 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