Significant Investment Progress Announcement

RNS Number : 9752F

J.P. Morgan Private Equity Ltd

30 April 2014

 

SIGNIFICANT INVESTMENT PROGRESS TO DATE

·      Invested approximatley $50 million in 4 Companies Since December

·      Represents ONE-THIRD OF $150 MILLION of the year-end 2015 Target investment amount

GUERNSEY, 30 APRIL 2014

In January 2014 JPEL announced that it would seek to invest $150 million through December 2015 in secondary direct deals or concentrated private equity LP positions.

JPEL is pleased to announce that with the completion of its fourth investment, it has deployed approximately $50 million of its $150 million investment target.  Due to strong distribution flows, JPEL has been able to fund all investments without increasing borrowings under its flexible credit facility.

The four investments include:

·      In December, JPEL invested approximately $14 million in a US-based tax advisory services firm whose primary business is to provide high-value consulting services relating to government-sponsored tax incentives.  

·      In February, JPEL invested approximately $14 million in Datamars SA, a leading supplier of animal identification systems (including pet and livestock) and textile identification systems.  

·      Also in February, JPEL invested approximately $7 million in Placid Holdings, a holding company with an investment in a leading branded Asian handset distributor, with a leading market position in smart phones and feature phones in India.  

·      In April, JPEL participated in a syndicate of global investors led by Arle Capital to acquire Innovia Group from the Candover 2001 Fund. JPEL invested approximately $14 million in Innovia, an international manufacturer of high quality, speciality films for its key markets of labels, overwrap, packaging and polymer banknote substrate.

Each of the four investments share common attributes that JPEL seeks:

·      Attractive entry value:  On aggregated basis, entry value for the four companies was approximately 6.7x LTM EBITDA and 5.6x 2014P EBITDA

·      Manageable leverage:  On a weighted average basis, debt at time of investment was approximately 1.8x 2013 LTM EBITDA.  2 of the 4 companies have net cash positions

·      High margins:  Weighted average LTM EBITDA margins of approximately 25%

·      Market leadership:  Each of the four companies is a market leader (top 1-3 player) in their respective business segments

·      Potential shorter duration:  All four companies are existing, mature private equity investments with the potential to be exited in the next 2 to 4 years

·      Visible EBITDA growth:  Each company projects significant EBITDA growth in the near or mid-term

JPEL currently has a very strong investment pipeline and is engaged in due diligence on two potential transactions that could be completed over the next two to three months.  Should these investments close, JPEL will have deployed approximately half of its $150 million investment target.    

For further information please contact:

J.P. Morgan Private Equity Limited

Greg Getschow 

[phone]

[e-mail] 

Rosemary DeRise / Samantha Ladd

[phone]  / [phone] 

[e-mail] / [e-mail]

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About J.P. Morgan Private Equity Limited

J.P. Morgan Private Equity Limited ("JPEL" or the "Company") is a Guernsey registered and incorporated, London Stock Exchange-listed, closed-ended investment company (LSE: JPEL, JPZZ, JPSZ).   The Company's capital structure consists of three classes of shares: US$ Equity Shares and two classes of Zero Dividend Preference Shares due 2015 and 2017, respectively.  

On 15 January 2014, JPEL announced a strategic update, which included plans to maximize net asset value through greater emphasis on JPEL's existing post-credit crisis investment strategy.   As part of this update, JPEL announced that it would cease dividend and capital distributions to US$ Equity Shareholders and continue its post-credit crisis investment strategy and will seek to invest $150 million in secondary direct deals or concentrated private equity LP positions.  The Company's goal is to create concentrated portfolio to improve ability to assess risk and to increase transparency on underlying portfolio.  At the end of the investment period in December 2015, JPEL expects that its top 30 company positions will comprise the majority of its total net asset value.  

The Company also announced a proposal for the creation of Redeemable Realisation Share Class ("RRS") whereby US$ Equity shareholders would be offered the option to transfer their US$ Equity shares for RRS Shares which will entitle holders to all cash realisations from the Company's investment portfolio in proportion to their aggregate holding within the equity of the Company.  This proposal requires shareholder approval and would take effect in 24 months, after the 2015 ZDP Shares are retired.  

On 15 January 2014, institutional investors purchased 84 million US$ Equity Shares through market purchases at $0.80 per share, an 8.3% premium to the 14 January 2014 share price.

 

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