DERICHEBOURG – Derichebourg Multiservices and Elior Group: project to create a leader in collective catering and multiservices – 20/12/2022 – 07:30

COMMUNICATION

Derichebourg Multiservices and Elior Group: project to create a leader in collective catering and multiservice

• The Derichebourg group (“Derichebourg”) announced today the signing of a memorandum of intent with the Elior Group with the aim of bringing the activity of Derichebourg Multiservices (“DMS”) to the Elior Group. Derichebourg SA, which already holds 24.36% of Elior Group’s capital, will see its stake increase to a total of 48.4%.

• Derichebourg will open a new chapter in its history, with a group refocused on its environmental DNA, and a strategic stake of 48.4% in a champion of collective catering and multiservices.

• This transaction will allow Elior Group to strengthen its financial profile and develop new business opportunities, with the support of a reference and long-term shareholder. The international presence of the Elior Group will be strengthened, with a total revenue of more than €5 billion.

• The transaction will offer strong potential for value creation with annual synergies estimated at a minimum of €30 million in full-year EBITDA “run rate” in 2026 and a positive impact on earnings per share from in the second year. .

• DMS is a leader in service activities for companies, industry and local authorities. The turnover of this activity for the 2022 financial year is 943 million euros, for an EBITDA of 49 million euros. DMS employs about 37,000 people.

• The transaction will value DMS at an enterprise value of €450 million, i.e. a multiple of 9.1x EBITDA for the financial year of 2022. 65 euros, in line with the price Derichebourg paid for the acquisition of a 14.7% stake in Elior from BIM as announced on May 19, 2022.

• Following the operation, the Board of Directors of the Elior Group will be restructured and will consist of 12 members, five of whom will be appointed at the proposal of Derichebourg to be more representative of the new shareholder balance.

• Daniel Derichebourg will become Chairman and CEO of Elior Group. He will retain the Presidency of Derichebourg. The General Management of Derichebourg will be entrusted to Abderaman El Aoufir.

• Derichebourg will continue to consolidate its stake in the Elior Group using the equity method.

• The completion of the transaction is subject to the satisfaction of the usual conditions precedent, to obtaining an exemption from the AMF to the filing of a mandatory public offer, to the validation of the competition authorities and to the approval of the operation in an extraordinary general. Elior Group meeting.

Paris, December 20, 2022. Derichebourg group and Elior Group today announce the signing of a memorandum of intent to transfer Derichebourg’s Multiservices business to Elior Group, in exchange for Elior Group shares to be held for the benefit of Derichebourg.

This project will create a new French champion in collective catering and multiservices. The experience and operational excellence of DMS will create value and business opportunities to meet the changing market and generate new entity growth.

Daniel Derichebourg says: ” By bringing Derichebourg Multiservices to the Elior Group, Derichebourg increases its strategic stake in the capital of the Elior Group and confirms its ambition as a reference and long-term shareholder. The Elior Group, during its evaluation of strategic options, fully realized the potential of the Derichebourg Multiservices industrial project, as well as the quality of our teams and our assets. We want to create a new world leader in collective catering and multiservices. I will bring all my experience as an entrepreneur to this new challenge. I am convinced of the company’s potential for recovery and value creation from this merger. »

Derichebourg Multiservices is a major operator of services to businesses and communities.

Led since 2008 by Boris Derichebourg, DMS has become a leading player in France and worldwide in the sector of outsourced services to companies, industrial and tertiary, public services and communities. DMS has more than 12,000 customers supported by its employees as close as possible to the field; the company is recognized for its privileged and long-standing relationships with its customers, including many SMEs.

The turnover of this activity has experienced continuous growth since 2012, reaching 943 million euros in 2022. Its diversified turnover is divided between soft and hard facility management (70%), industry ( 12 %), HR and interim sourcing (16%), energy and urban spaces (3%). Ebitda margin is more than 5% since 2020.

DMS has extensive experience in integrating new activities and employees of acquired entities, with more than 20 acquisitions carried out in 5 years. DMS benefits from a very dense regional presence in France as well as strong positions in Spain and Portugal.

DMS has an agile and efficient customer-centric organization with short decision-making processes, decentralized management of activities and special attention to monitoring contract profitability and cash generation.

DMS has excellent cross-selling skills and multi-service offerings to its customers. During the period 2012-2022, DMS achieved a regular increase in its turnover with an average growth (CAGR) of +6% per year and operating margins that were systematically positive regardless of cycles or crises during this period.

Elior Services is a benchmark player in services.

Elior Services is a major player in France in bio-cleaning, sanitation and hygiene and soft facility management. In 2022, the activity achieved a turnover of 595 million euros, divided between the health sectors (57%), services and industry (40%) and education (3%).

Elior Services has 22,500 employees, spread over approximately 2,400 sites, with long-term customer relationships, particularly with many key accounts.

The Derichebourg Multiservices activities transferred to the Elior Group will strengthen the new group’s market positioning and its financial profile.

An industrial project that responds to market challenges

The new group will have an enriched offer, combining multi-service and collective catering services, making it possible to strengthen its positions in the changing market. The whole will have a more balanced profile: collective catering representing 71% of turnover and multi-service, which has proven their stability during the health crisis, 29% of turnover.

In addition to the Elior Group’s strong positions in collective catering, DMS will strengthen the new entity’s service in soft facility management (cleaning, reception, green spaces) and provide new complementary services with a high added value in security , hard facility management (energy efficiency, public lighting) as well as in HR and temporary services and aeronautical subcontracting.

The contribution of DMS activities to the Elior Group will allow the new entity to have a wider client portfolio, with an international footprint (United States, Spain and Portugal, Italy, United Kingdom, Germany, China, etc. ) that can strengthen the growth markets. Strong complementarities exist in the portfolios of DMS and Elior Group, with clients in large companies, SMEs and the public sector.

The proposal for integrated offers and additional sales within the services activity can be extended to institutional catering. The contribution of DMS represents new business opportunities for the Elior Group, to meet new market expectations.

A strengthened financial profile

This project will improve Elior Group’s financial profile, making it more stable, more profitable, and leverage will be immediately reduced, giving the group the ability to accelerate its growth.

The transaction will offer strong potential for value creation with annual synergies estimated at a minimum of €30 million in full-year EBITDA run rate in 2026 and a positive impact on earnings per share from 2024 . .

A new readability for the organization of Derichebourg group activities.

This significant transaction will give a new face to the organization of Derichebourg’s activities, refocusing on its environmental DNA while holding a 48.4% strategic stake in a new world champion in multiservices and catering.

This new entity can enable the creation of long-term value for all Derichebourg shareholders.

Terms of transaction

The contribution of the DMS business, valued at €450 million, i.e. a multiple of 9.1x EBITDA for the 2022 financial year, will be financed by the issue of new Elior Group shares in favor of Derichebourg, based on a value of €5.65 per share, representing a premium of 119% and 128% compared to the last market price and the average 1 month before the rumor, and corresponding to the price Derichebourg paid for the acquisition of the 14.7% stake in Elior from BIM in May 19, 2022.

Derichebourg SA will apply to the Autorité des Marchés Financiers to obtain a waiver from the obligation to file a public tender offer for Elior Group shares.

Indication timetable and conditions

The operation is subject to obtaining an exemption from the AMF in relation to a mandatory public offer, the validation of the competition authorities, the approval of the operation at an extraordinary general meeting of Elior (it is specified that Derichebourg is will not take part in voting on resolutions regarding the contribution of DMS) and the satisfaction of the usual conditions of realization.

The closure of the operation is expected in the months of April-May 2023.

Tips

BNP Paribas and Centerview Partners are acting as financial advisors to Derichebourg and Hoche Avocats are acting as legal advisors.

About Derichebourg

The Derichebourg group is a major international player in business and community services. It offers a complete and integrated range of services in two complementary business sectors: environmental services (recycling, recovery, household waste collection, urban cleaning, management of waste collection centers, etc.) and business services (cleaning , energy, temporary, aeronautics , etc.). The group is now present in 13 countries on 3 continents and has around 42,900 employees worldwide. The Derichebourg group achieved a turnover of 5.3 billion euros in 2022. For more information : https://www.derichebourg.com/

Touch contacts

Julien Tahmissian – RULE

Julien.tahmissian@plead.fr

+33 7 88 35 98 90