20 Dec 2016 07:00
PRESS RELEASE
20 December 2016
This announcement contains inside information.
Epiris announces the sale of Electra's interest in Innovia Group
Epiris is pleased to announce the realisation of Electra Private Equity PLC's ("Electra") interest in Innovia Group, a leading manufacturer of speciality films and substrate for polymer banknotes. Innovia Group has been sold to CCL Industries for an enterprise value of $1.13 billion*. The transaction is subject to regulatory and change of control approvals as well as customary completion procedures with closing expected by the end of the first quarter, 2017.
Based on today's exchange rates, Electra would receive proceeds from the sale of £106 million, an uplift of £26 million or 32% and equivalent to an increase in its NAV of 52 pence per share, on the valuation of the investment at 30 September 2016. This equates to a return of 3.2x cost, and an IRR of 51%**.
Innovia is headquartered in Cumbria and operates four manufacturing sites worldwide. Innovia's Security division is the leading manufacturer of polymer banknote substrate for central banks, benefiting from a strong intellectual property portfolio and a 20-year track record producing substrate for 24 central banks.
Innovia's Films division is a leading global producer of speciality high performance films primarily used in packaging applications for the food and tobacco industries. Innovia Films benefits from high barriers to entry and steadily growing demand. It occupies leading positions in mature niche markets and enjoys long-term customer relationships.
Epiris invested €40 million as a cornerstone investor in The Smithfield Group's acquisition of Innovia in 2014 and is represented on the Board of the business by Chief Investment Partner, Bill Priestley.
Bill Priestley, Chief Investment Partner at Epiris, said:
"We are delighted with the outcome of our investment in Innovia. The business has been transformed with the investment in new manufacturing capacity and with the sale of the Cello packaging business. Today's announcement marks the conclusion of a period of significant strategic progress for the business."
Bill Priestley and Owen Wilson are responsible for the investment and the exit of Innovia Group.
J.P. Morgan Cazenove acted as sole financial advisor for the sellers on the transaction.
Epiris refers to Epiris Managers LLP acting on behalf of its client Electra Private Equity PLC.
Ends
* $1.13 billion Canadian dollars. The exchange rate used was 1.4 C$ / Euro.
** Based on 28 February 2017 completion.
This is not an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or an exemption from registration. Any investment in any Epiris fund shall be qualified in its entirety by the terms and conditions of that fund's offering materials including any prospectus.
For further information please contact:
Andrew Honnor, Matthew Goodman, Matthieu Roussellier, Greenbrook Communications
+44 (0)20 7952 2000
Nicholas Board and Andrew Kenny, Epiris
+44 (0)20 7306 3902
Note to Editors:
About Epiris LLP
Epiris is a top-decile private equity fund manager with over 25 years' experience. During this time it has invested in excess of £4.7 billion in over 200 deals. As at 30 September 2016, the firm had funds under management of £2.2 billion. Epiris' flexible investment strategy has allowed it to invest broadly across the private equity market, principally in Buyouts and Co-investments as well as loan-to-own debt.
The firm's major client is Electra Private Equity PLC ("Electra"), a private equity investment trust which has been listed on the London Stock Exchange since 1976. Electra's long-term investment performance has been consistently superior to private equity and other benchmarks.
Over the five years to 30 September 2016, Electra has seen NAV per share growth of 141%, equivalent to an annualised return of 19%.
Over the same time period Electra's share price total return has been 231%, more than twice the total return of the FTSE-250 index and more than three times the total return of the FTSE All-Share Index. Electra's shares have outperformed the FTSE All-Share by 24% per annum on a risk-adjusted basis.
For full details of Electra's results for the year to September 2016 or for further information please visit www.epiris.co.uk.
Issued by Epiris Managers LLP which is authorised and regulated by the Financial Conduct Authority.
About Smithfield
The Smithfield Group LLP buys, operationally improves and grows businesses headquartered in Europe and North America. Value is returned to Smithfield's investors when the businesses are sold. Smithfield's most recent acquisition was US headquartered Pure Power Technologies, which was acquired in 2016 from Navistar.
About CCL Industries
CCL Industries employs more than 20,000 people operating 156 production facilities in 35 countries on 6 continents with corporate offices in Toronto, Canada and Framingham, Massachusetts.
CCL Label is the world's largest converter of pressure sensitive and extruded film materials for a wide range of decorative, instructional and functional applications for large global customers in the consumer packaging, healthcare and chemicals, consumer durable, electronic device and automotive markets. Extruded and laminated plastic tubes, folded instructional leaflets, precision decorated and die cut components, electronic displays and other complementary products and services are sold in parallel to specific end-use markets. Avery is the world's largest supplier of labels, specialty converted media and software solutions to enable short-run digital printing in businesses and homes alongside complementary products sold through distributors and mass market retailers.
CCL Container is a leading producer of impact extruded aluminium aerosol cans and bottles for consumer packaged goods customers in the United States and Mexico. Checkpoint is a leading manufacturer of technology-driven, loss prevention, inventory management and labelling solutions, including RF and RFID-based, to the retail and apparel industry.
About Innovia
Innovia Group is the global leader in high-tech film products for packaging and industrial applications and banknotes. Headquartered in Wigton, UK, the Group employs approximately 1200 people.
Innovia Security, its polymer banknote division, has produced c.50 billion polymer banknotes for central banks around the world, representing over 99% of all polymer notes in global circulation since their introduction in Australia in the early 1990s. Its Guardian® substrate is used in 24 countries and provides significant benefits and cost savings to central banks.
In its Films division Innovia is a leading global developer and manufacturer of speciality labels and packaging for a range of technologically advanced industrial applications. It is the global market leader in pressure sensitive labels and tobacco overwrap. Its highly differentiated, proprietary manufacturing methods deliver enhanced product and operational performance for customers, providing a combination of enhanced security and brand integrity.