RCS - Deutsche Beteiligung - Edison issues review on Deutsche Beteiligungs

Deutsche Beteiligungs AGAnnouncement

16/02/2021 15:05

RNS Number : 2926P
  
Deutsche Beteiligungs AG
  
16 February 2021
  
 

 
London, UK, 16 February 2021
 
Edison issues review on Deutsche Beteiligungs (DBAN)
Deutsche Beteiligungs (DBAG) reported a 5.9% NAV (defined as equity per share) increase in Q121 (ending December 2020) driven by the improved earnings prospects of its portfolio companies across sectors. Fee income improved markedly to €11.1m (Q120: €7.4m) as DBAG Fund VIII started investing in August 2020 and management's guidance for FY21 remains €42-44m (vs €30.6m in FY20). DBAG sees a number of opportunities and is likely to be a net investor in FY21, including deals alongside its funds (it has €0.9bn of third-party capital ready to deploy) and long-term financing fully from its own balance sheet.
 
·      While the high level of PE dry powder means increased competition for private assets (pushing up valuations in most sought-after sectors), DBAG's expertise in sourcing deals from founders and families is a competitive advantage.
·      Although DBAG's MBO activity in Q121 involved only the completion of the €24m congatec deal (agreed in August 2021), its portfolio companies were quite active with six add-on acquisitions and one spin-off agreed in the period.
·      Management is in advanced negotiations on two realisations, with another one at an early stage. Based on DBAG's Q121 analyst call, we expect that at least one relates to a holding from its broadband/telecom portfolio (which on average is valued at a healthy 2.5x cost).
·      DBAG's near-term funding needs are secured by its current liquidity (including the undrawn part of its credit lines) and expected exits, but it is considering external financing options to fuel its mid-term investment agenda.   



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