New financial partner will help accelerate international expansion and product innovation.
EFR Holdings SAS, an acquisition vehicle controlled by funds affiliated with Francisco Partners, acquired on September 23, 2011 a majority of the share capital and voting rights of eFront S.A. (“eFront” or the “Company”), a business software solutions provider dedicated to the financial industry, listed on the Alternext Paris market of NYSE Euronext (ALEFT).
EFR Holdings SAS has acquired 2,273,793 eFront shares representing 74.19% of the share capital and voting rights of the Company (60.34% on a fully diluted basis) for a cash price of EUR 18.00 per share. The selling shareholders comprised funds managed by CDC Innovation, Odyssée Venture and OTC Asset Management, and the companies IBIM 2 Ltd and RRA Vendôme. The purchase price of EUR 18.00 per share comprises an upfront payment of EUR 13.50 per share paid on September 23rd, 2011 and a EUR 4.50 per share deferred payment, guaranteed by Francisco Partners, to be paid no later than January 2012.
The purchase price of EUR 18.00 per share represents a premium of 62.16% in relation to the closing share price on September 22nd, 2011 of EUR 11.10, 71.20% to the weighted average share price over the last 20 days, and 88.57% to the weighted average share price over the last 250 trading days. This price equates to an equity value for the entire issued ordinary share capital of eFront on a fully diluted basis of approximately EUR 68 million.
“In a difficult market environment, Francisco Partners offers a significant premium to our shareholders over the last closing price. We firmly believe that this transaction delivers a value to our shareholders that would have taken years to be achieved as a listed company. In addition, the financial backing of Francisco Partners provides eFront with the means to further accelerate international expansion and product innovation,” stated Olivier Dellenbach, founder and CEO of eFront.
In parallel, on September 23rd, EFR Holdings SAS entered into an irrevocable agreement with key managers of eFront for the acquisition of 615,160 shares (a portion of which will result from the exercise of existing options and BSPCEs), representing 16.33% of the diluted share capital and voting rights of the Company and for their reinvestment into EFR Holdings SAS through a contribution in kind of 352,366 shares (a portion of which will result from the exercise of existing BSPCEs) representing 9.35% of the diluted share capital and voting rights of the Company. Both transactions are based on a value of EUR 18.00 per eFront share.
As required by applicable regulations, EFR Holdings SAS will file a simplified all-cash tender offer (OPA simplifiée) with the Autorité des Marchés Financiers (AMF) as soon as possible for eFront shares at EUR 18.00 per share. Following the tender offer, EFR Holdings SAS reserves the possibility, subject to completion of legal requirements, to pursue a squeeze-out (retrait obligatoire) at a price of EUR 18.00 per eFront share. Prior to the opening of the offer, EFR Holdings SAS will control shares of eFront representing 86.02% of the share capital and voting rights of the Company on a fully diluted basis, subject to the execution of the above-mentioned irrevocable agreement with eFront’s key managers.
EFR Holdings SAS will file with the AMF a draft offer information note (projet de note d'information) which will provide detailed information on the offer. In addition, eFront will file a draft response note (projet de note en réponse) which will include an independent expert report from Ricol Lasteyrie on the fairness of the financial terms and conditions of the simplified tender offer and squeeze-out.
The Company has requested a trading suspension of its shares from Euronext until the opening date of the simplified tender offer.
As a consequence of the change of control, four Board members of eFront have resigned and two new Board members have been coopted. The Board of eFront now includes, in addition to Olivier Dellenbach, who remains as its CEO, Deep Shah and Peter Christodoulo, both coopted upon proposal by EFR Holdings SAS.
“The eFront management team has proven their ability to execute on a global basis,” said Deep Shah of Francisco Partners. “We are excited to support them as they continue to build out their organization and vision for eFront in the coming years.”
Peter Christodoulo of Francisco Partners added, “We are very impressed with the technology platform that eFront has built over the last decade and look forward to working with management to drive growth through continued investment in new innovative products.”
Wragge & Co served as legal advisor to eFront and its managers. DC Advisory Partners served as financial advisor, the Franklin law firm served as legal advisor and Arsene Taxand as tax advisor to Francisco Partners. The simplified all-cash tender offer (OPA simplifiée) will be presented by CM-CIC Securities, acting on behalf of EFR Holdings SAS.
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