ST. PETER PORT, Guernsey, April 17 /PRNewswire/ --
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This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus to be published by European Capital Limited in due course in connection with the admission of the ordinary shares in the capital of the Company to the Official List of the Financial Services Authority and to trading on London Stock Exchange plc's main market for listed securities (the "Prospectus"). Copies of the Prospectus will, following publication, be available from European Capital Limited's registered office.
European Capital Limited ("European Capital"), a closed-ended investment company incorporated in Guernsey, announces its intention to proceed with an initial public offering of ordinary shares to certain institutional and other investors (the "Offer"). European Capital intends to seek a secondary listing under Chapter 14 of the Listing Rules of the UK Listing Authority (the "Listing").
Introduction
European Capital is a closed-ended investment company incorporated in Guernsey in August 2005 for pan-European equity, mezzanine and senior debt investment. It is managed by European Capital Financial Services (Guernsey) Limited (the "Investment Manager"), a wholly-owned subsidiary of American Capital Strategies, Ltd. ("American Capital"). American Capital is a leading US based investor in equity, mezzanine and senior debt securities and is also the majority owner of European Capital.
The investment objective of European Capital is to provide investors with dividend income and the potential for share value appreciation by investing in debt and equity investments in private and public companies headquartered predominantly in Europe.
European Capital seeks to achieve its investment objective through pursuing the following types of investments:
(i) European Capital Sponsored Buyouts-providing debt and equity financing as the lead investor in the buyout of private and public companies;
(ii) Mezzanine Direct with Sponsors-providing debt and equity financing for buyouts sponsored by private equity firms where the European Capital Group is either the sole or lead mezzanine debt investor;
(iii) Syndicated Mezzanine and Senior Debt-providing mezzanine and senior financing for buyouts sponsored by private equity firms where the European Capital Group is neither the sole nor lead mezzanine or senior debt investor; and
(iv) Direct Investments-providing debt and equity financing directly to private and public companies, which is used for growth, acquisitions or recapitalisations, and investing in structured finance vehicles.
As at 15 April 2007 the European Capital Group had invested an aggregate of EUR1.6 billion in 45 companies since its establishment in August 2005, of which EUR1.2 billion was invested in 30 companies during 2006. Since its establishment, European Capital has received EUR288 million from refinancing and syndication of senior investments and EUR203 million from repayments and exits. The value of European Capital's investments in portfolio companies as at 15 April 2007 was EUR1.2 billion. As at 31 December 2006, European Capital's net asset value per preferred share of no par value in the capital of the Company (each a "Preferred Share") was EUR9.92 and, as at 15 April 2007, European Capital had paid dividends of EUR37.5 million.
Investment highlights
-- Europe is the second largest private equity market and the largest mezzanine finance market in the world by amount invested. European Capital and the Investment Manager consider, as a result of a number of factors, that the European mezzanine market represents a prime opportunity for new entrants and that the European buyout market also represents a meaningful opportunity.
-- European Capital expects to benefit from the European presence of the Investment Manager and European Capital Financial Services ("ECFS"), a subsidiary of the Investment Manager. This includes investment teams in London, Paris and Frankfurt with extensive experience in European mezzanine and buyout markets. ECFS expects that over time it will open additional offices in other major European financial centres and also intends to expand its existing investment teams.
-- European Capital's institutional approach, based on the American Capital model, provides it with certain competitive advantages. European Capital is able to invest across a portfolio company's entire capital structure, to provide portfolio companies with long-term financing through its permanent capital base and to respond quickly to potential investments due to its access to European staff and infrastructure. For One-Stop Buyouts(TM), European Capital provides equity, senior debt and mezzanine debt. For One-Stop Financings, European Capital provides all of the senior debt, mezzanine debt and equity co-invest to support an equity sponsor. Also, European Capital can fund itself efficiently through both debt and equity capital resulting in a lower blended cost of capital than traditional private equity firms.
American Capital overview
American Capital was founded in 1986 and is a NASDAQ-listed alternative investment asset management company which directly and through managed funds provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalisations. It had approximately $10.9 billion of assets and capital commitments under management as at 31 December 2006.
The Chairman of European Capital is the founder of American Capital and has been its director, Chief Executive Officer and President since American Capital's inception in 1986, and has been its Chairman other than from August 1997 to August 1998.
Summary of the Offer
-- Indicative price range of EUR9.84 to EUR12.00 per share, which implies a market capitalisation of approximately EUR1.04 billion to approximately EUR1.27 billion.
-- The Offer is expected to consist of the issue of up to 12.7 million shares, implying a total Offer size of approximately EUR125 million.
-- The Offer may include an over-allotment option from the Company exercisable for a period of up to 30 days from the commencement of conditional dealings, of up to 15% of the shares issued under the Offer.
Citigroup Global Markets Limited ("Citigroup"), JPMorgan Cazenove Limited ("JPMorgan Cazenove") and Merrill Lynch International ("Merrill Lynch") have been appointed as joint global co-ordinators and joint bookrunners in relation to the Offer.
NOTES TO EDITORS
European Capital's investment criteria
The European Capital Group targets companies that generally meet a combination of the following criteria: a robust track record, strong cash flows, significant growth prospects, strong competitive positioning, an experienced management team with a significant ownership interest and potential for the European Capital Group to gain liquidity and/or realise appreciation in its investments.
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