Dear Shareholders,
The cycle reversal that we have been witnessing since the second half of 2007 continued at the same pace over the first eight months of 2008, with a very clear deterioration of the situation in mid-September, following the bankruptcy of Lehman Brothers. This led to widespread mistrust of financial institutions, which were significantly weakened by the bursting of the credit bubble and a sharply fall of stock market multiples, as the CAC decreased 43% in 2008 and lost a further 15% over the first 2 months of 2009. This financial crisis is accompanied by a worldwide economic recession, the scope of which and the speed at which it is spreading have not been seen since World War II.
The Private Equity industry has not been spared: the sector has been directly affected by the shrinking of the mergers & acquisitions market, linked to the near-closing of the debt markets since September 2008, the fall in stock market multiples that are the main benchmarks used to value portfolios and, naturally, the economic slowdown. As a result, Private Equity in France has sunk to the lowest level it reached in 2003.
In this environment, Altamir Amboise saw its NAV fall 35% in 2008 to 9.80 euros, most of which is explained by the decline in stock market multiples. In addition, its share price, like that of many quoted Private Equity companies, fell sharply, to 2.53 euros at the end of 2008, i.e. a decline of 74% over one year and a 74% discount in relation to NAV per share at 31 December 2008.
Although the short-term situation is rather grim, the future lies in the diversity and quality of our portfolio. Over the past year, the portfolio took on two new, extremely significant stakes for a cost price of 76 millions of euros: Altran Technologies, the European leader in innovation consulting, and Maisons du Monde, a leading specialised home decoration and furniture retailer in France. The portfolio is now comprised of 21 significant companies representing 97% of IFRS assets at 31 December 2008. Overall, these 21 companies have performed well, with a rise of more than 7% of their total turnover and nearly 4% of their total Ebitda. By way of comparison, the 34 non-financial firms comprising the CAC 40 saw their Ebitda slide 4% and their debt surge 14%, compared to the Altamir Amboise portfolio companies.
As no major disposals were made during the year, Altamir Amboise finished the year with cash reduced to 2.2 millions of euros. Although this level of cash is insufficient to enable Altamir Amboise to accompany the Apax funds in new investments in 2009, it is important to point out that, unlike many other quoted Private Equity companies, Altamir Amboise is not contractually bound to invest, other than to accompany the existing portfolio, and, moreover, has no debt. It has access to a 26 millions of euros credit line until 30 June 2009, which is in the process of being rolled over and several projects are currently being looked into with a view to generating cash in 2009. A first project crystallised in February 2009 with the signing of an agreement for the disposal of Corevalve, a start-up in our Healthcare portfolio. This disposal, which is expected to take place in April, will be reflected in a first payment corresponding to 7 times the initial investment, i.e. approximately 6 millions of euros, with potential additional payments contingent upon the achievement of agreed milestones and for a maximum of 2 millions of euros.
We don’t expect any significant economic recovery before the second half of 2010. Our team is thus highly focused to help the portfolio’s companies to go through the crisis, to seize any opportunities that will arise and to prepare for the future.
We are confident about our company’s fundamentals and prospects. The Partners of Apax have thus added to their interest in Altamir Amboise, bringing it to 22.35% of the capital
Maurice Tchenio
Chairman of Altamir Amboise’s Management Company
|
|
