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Onex Completes Majority Investment in OneDigital

Onex

One of the Largest Employee Benefits and Retirement Advisors –
Toronto, November16,2020–

Onex Corporation (“Onex”) (TSX: ONEX) and its affiliated funds (the“Onex Group”)today announced it has completed a majority investment in OneDigital,a leading U.S. provider of employee benefits insurance brokerage and retirement consulting services. The new equity investment was made by OnexPartners V and certain co-investors. New Mountain Capital, the former majority shareholder, and OneDigital employees have rolled a significant portion of their existing investments into the transaction.

About Onex
Founded in 1984,Onex invests and manages capital on behalf of its shareholders, institutional investors and high networth clients from around the world. Onex’ platforms include: Onex Partners, private equity funds focused on larger opportunities in North America and Europe;ONCAP, private equity funds focused on middle market and smaller opportunities in NorthAmerica; Onex Credit, which manages primarily non-investment grade debt through collateralized loan obligations, senior loan strategies and other private creditstrategies; andGluskin Sheff’s wealth management services including its actively managed public equity and public creditfunds. In total, Onex has approximately $36.6billion of assets under management, of which approximately $6.7billionis its ownshareholder capital. With offices in Toronto, NewYork, New Jersey and London, Onex and its experienced management teams arecollectively the largest investors across Onex’ platforms.
TheOnex Partners andONCAP businesses haveassets of$36billion, generateannualrevenuesof $22billion and employ approximately 149,000 people worldwide. Onex shares tradeon theToronto Stock Exchange under the stoc ksymbol ONEX. For more information on Onex, visit its website at www.onex.com. Onex’ security filings can also be accessed at www.sedar.com.

About OneDigital

OneDigital is the leading strategic advisory firm in the U.S. and has consistently led from the front as a workplace ally for 20 years. OneDigital’s unique ability to converge health, wealth and human resources into ahub of services and business guidancehas empowered companies to create workplaces that attract and retain talent while fueling innovation and company growth. As employee healthcare, wellness and workplace benefits continue to shift, companies of all sizes have relied on OneDigital’s exceptional advisory teams for counsel and its adjacent services, including employee benefits, holistic HR services, retirement and wealth management, employee wellbeing and pharmacy consulting. Headquartered in Atlanta, OneDigital’s more than 100 offices and 2,000 business strategists serve the needs of over 50,000 employers across the United States.

OneDigital has been named to the Inc. 5000 List of America’s fastest-growing companies every year since 2007, one of only 12 companies to do so. Currently listed as 18th on Business Insurance’s list of 100 Largest U.S. Brokers, OneDigital’s deep analytic abilities and experienced advisors deliver insights that reduce business risk and improve plan design and performance. For more information, visit www.onedigital.com.

Forward-Looking Statements
This press release may contain, without limitation, statements concerning possible or assumed future operations, performance or results preceded by, followed by or that include words such as “believes”, “expects”, “potential”, “anticipates”, “estimates”, “intends”, “plans” and words of similar connotation, which would constitute forward-looking statements. Forward-looking statements are not guarantees. The reader should not place undue reliance on forward-looking statements and information because they involve significant and diverse risks and uncertainties that may cause actual operations, performance or results to be materially different from those indicated in these forward-looking statements. Except as may be required by Canadian securities law, Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. These cautionary statements expressly qualify all forward-looking statements in this press release.

For Further Information
Jill Homenuk
Managing Director, Shareholder Relations and Communications
Tel: +1 416.362.7711

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Montagu to acquire ISI Emerging Markets Group

Montagu

Montagu Private Equity (“Montagu”), a leading European private equity firm, announces that it has agreed to acquire ISI Emerging Markets Group Ltd (“ISI”), the number one provider of macroeconomic, business and industry intelligence on global emerging markets, from CITIC Capital and Caixin Global. Completion of the sale is expected next month, subject to customary closing requirements.

We are pleased to have found a partner with a strong track-record and expertise in backing companies with similar business models to ours.

Aloisio Parente, CEO of ISI Emerging Markets Group

ISI is renowned globally as the leading provider of data, analysis and research for the world’s fastest growing and highest potential countries. It aggregates unstructured, hard-to-obtain information from local and international sources, and validates and curates it into standardised, methodologically consistent and editable content. The products are trusted tools used by a large and diversified customer base made up of blue-chip financial institutions, multinationals, consultants, and researchers worldwide and are available in over 15 languages. ISI operates a subscription model, providing customers with business-critical emerging markets research, leveraging real-time macroeconomic, business and industry intelligence across multiple use cases.

Aloisio Parente, CEO of ISI Emerging Markets Group, said: “Following the carve-out from Euromoney Institutional Investor in 2018, subsequent integration of CEIC and EMIS and investments into the sales network and content, ISI has become the prime source for comprehensive, high quality market intelligence on global emerging markets. We are pleased to have found a partner with a strong track-record and expertise in backing companies with similar business models to ours. We look forward to working with the Montagu team to grow the business by expanding our market coverage and investing in product offering to further enhance value to our customers.”

Pawel Czarnowski, Director at Montagu, said: “For more than 30 years, ISI has been a leading provider of macroeconomic, business and industry intelligence on global emerging markets. Its subscription-based information services are critical, trusted parts of its customers’ workflows. As a business with resilient revenue and loyal customers, that is also well-positioned to deliver accelerated growth opportunities, ISI is an excellent fit for Montagu’s investment strategy. We look forward to working with Aloisio and the team to support the business in this exciting next chapter of growth”.

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STG raises $2.0 billion for STG VI in a four-month fully virtual fundraise

Stg Partners

STG raises $2.0 billion for STG VI in a four-month fully virtual fundraise

STG VI exceeded its $1.5 billion target and was heavily oversubscribed

Palo Alto, CA – November 16, 2020 – STG Partners (“STG”, or the “Firm”), a leading private equity firm focused on investing in the software, data analytics and software-enabled technology services sectors, is pleased to announce the final closing of STG VI (the “Fund”) on $2.0 billion of committed capital, including limited partner commitments of $1.85 billion. The Fund exceeded its $1.5 billion target and was oversubscribed at its limited partner hard cap in approximately four months from formal launch of the fundraise, which was executed as an entirely virtual process. Evercore Private Funds Group acted as the exclusive global placement agent for the fundraise.

The Fund will continue STG’s value-oriented investment strategy focused on middle market investments in the enterprise software and software-enabled technology services sectors. STG distinguishes itself through a value-oriented and operationally-focused approach to transforming middle market companies in its sectors into market leaders. Since Symphony’s founding in 2002, STG has cultivated its reputation as a premier investment firm in the space through its continued ability to drive operational efficiencies, top-line enhancement, and breakout innovation within portfolio companies.

STG VI launched in June 2020 amidst the COVID-19 pandemic and resulting shutdown. With investors unable to meet in person, STG moved ahead with a virtual process, driven by high conviction in the robust market opportunity for STG’s differentiated, value-oriented strategy within the technology sector and top quartile performance of STG’s predecessor funds across market cycles. STG made extensive use of video conferencing to meet with limited partners, as well as virtual due diligence sessions including an investor diligence day webcast to further showcase the organization in the absence of in-person meetings or events. STG VI received strong support from existing investors, as well as a diverse group of new investors that includes public and corporate pensions, insurance companies, endowments and foundations, family offices, consultants, and asset managers from North America, Europe, and Asia.

On behalf of the leadership team of the Firm, William Chisholm, Managing Partner and Chief Investment Officer, commented: “We are incredibly grateful to our existing and new investors for their support, especially given the context of the unprecedented environment in which we raised STG VI. We are excited about the opportunity ahead for the Fund, as well as the team and platform we have in place as we head into the next chapter for STG.”

Richard Anthony, CEO of Evercore Private Funds Group, stated: “We are delighted to have once again advised STG on another highly successful fundraise, executed in a fully virtual environment. The expediency of the raise to its hard cap speaks volumes about the caliber of William and his team at STG.”

Kirkland & Ellis LLP acted as legal counsel to STG.

About STG Partners

STG is the private equity partner to market leading companies in software, data analytics and software-enabled technology services sectors. The firm brings expertise, flexibility, and resources to build strategic value and unlock the potential of innovative companies. Partnering to build customer-centric, market winning portfolio companies, STG creates sustainable foundations for growth that bring value to all existing and future stakeholders. The firm is dedicated to transforming and building outstanding technology companies in partnership with world class management teams. STG and its predecessor, Symphony Technology Group (“Symphony”), have raised approximately $5.0 billion in total capital commitments across five funds and their expansive portfolio has consisted of more than 30 global companies. For more information, please visit www.stgpartners.com.

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EQT acquires majority stake in thinkproject, Europe’s leading SaaS construction intelligence platform

eqt

  • EQT IX acquires a majority stake in thinkproject, Europe’s leading SaaS provider of construction intelligence solutions for the Architecture, Engineering, Construction and Owner-operated (AECO) industry
  • thinkproject helps improve its customers’ delivery times, reduce waste and energy consumption, while improving sustainability in one of the key carbon emitting industries globally. Its software product suite covers the full construction lifecycle and is driving digitization in one of the largest but least digitally penetrated industries
  • EQT aims to accelerate thinkproject’s growth through its strong commitment towards sustainability and digitization, and to support product extension, geographical expansion, and consolidation of the fragmented construction software space

EQT is pleased to announce that the EQT IX fund (“EQT IX”) has acquired a majority stake in thinkproject (“the Company”) from TA Associates (“TA”) and thinkproject’s founder Thomas Bachmaier. TA, Thomas Bachmaier and the management team will re-invest significantly into the Company in the context of this transaction. thinkproject’s management team, led by CEO Gareth Burton and CFO Ralf Gruesshaber, will continue to lead the Company and build on its strong track record of growth and innovation.

Founded in 2000 and headquartered in Munich, thinkproject serves more than 250,000 users in over 60 countries. Its cloud-delivered, integrated digital solutions help customers be more efficient, cost-effective and simplify their digital transformation across the construction lifecycle. The Company employs around 450 people and its software is used by 2,750 customers across international private and public asset owners, project developers, and general contractors.

thinkproject’s underlying end market, the construction industry, is one of the largest and least digitized industries globally. In recent years, the AECO industry has seen an accelerated digitization momentum and widespread technological adoption. This shift is driven by multiple secular trends, including stagnant productivity, growing cost pressure, increasing regulation, a demographic move towards a new generation with greater IT affinity and focus on sustainability. By improving delivery times and reducing waste and energy consumption, thinkproject helps cut emissions in one of the key carbon emitting industries globally. The Company’s efforts in this field are contributing to the United Nations Sustainable Development Goal #12, “Responsible Consumption and Production”.

thinkproject’s management team has executed on a strategic growth agenda with a focus on digitization, technological innovation and sustainability across several levers. EQT intends to support the current direction taken by the management team by further growing the Company’s global customer base, backing product extension, geographical expansion and supporting a consolidation of the fragmented construction software space. thinkproject is expected to leverage the full EQT platform during its next phase of growth, including EQT’s digital and sustainability expertise, local-with-locals presence across Europe and Asia-Pacific, and domain experience. Moreover, the Company will be supported by the EQT Network, including advisors from EQT’s software, real estate and infrastructure space.

Florian Funk, Partner at EQT Partners, said: “For us, thinkproject represents a truly thematic investment at the intersection of EQT’s two core value creation pillars, sustainability and digitization. After having followed thinkproject over the last couple of years, we are thrilled by the opportunity to work together with the management team and TA Associates to further develop this exciting company. This investment is perfectly aligned with EQT’s core focus of investing in high growth companies and partnering with world class management teams. We are truly impressed by the market leading position thinkproject has built and EQT is excited to support its vision of becoming a global champion.”

Gareth Burton, CEO of thinkproject, said: “EQT is one of the most active and successful private equity investors in the TMT sector with a very profound expertise specifically in the construction sector. thinkproject’s management team and EQT both share the strong conviction around the sector’s fundamentally attractive growth dynamics as well as thinkproject’s ability to further build out its excellent market leadership position and to build the leading global construction intelligence platform. thinkproject continuously strives to serve our customers to help construct a better world.”

Morgan Seigler, Managing Director at TA Associates, said: “Since our investment four years ago, the thinkproject management team has demonstrated an exceptional commitment to the company’s strategic growth initiatives and customers. We believe that these efforts have helped thinkproject transform into Europe’s leading SaaS provider of construction intelligence solutions for the AECO industry. We are thrilled to welcome EQT as our new partner, and we look forward to working with them alongside the thinkproject management team during the company’s next phase of growth.”

The transaction is subject to customary closing conditions and regulatory approvals. It is expected to close by year end.

With this transaction, EQT IX is expected to be 15-20 percent invested, based on its target fund size.

Milbank acted as legal advisors to EQT. Arma Partners acted as financial advisors to thinkproject, and Hengeler Mueller and Travers Smith served as legal counsel.

Contact
Florian Funk, Partner at EQT Partners and Investment Advisor to EQT IX, +49 89 2554 9908
EQT Press Office, press@eqtpartners.com, +46 8 506 55 334
Karolin Beck, CMO at thinkproject, karolin.beck@thinkproject.com, +49 173 671 4422
thinkproject press contact: Fabian Pecht / Samet Simsek, Havana Orange GmbH, thinkproject@havanaorange.de, +49 89 92 131 51 – 78/70

About EQT
EQT is a purpose-driven global investment organization with more than EUR 75 billion in raised capital and over EUR 46 billion in assets under management across 16 active funds. EQT funds have portfolio companies in Europe, Asia-Pacific and North America with total sales of more than EUR 27 billion and approximately 159,000 employees. EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.

More info: www.eqtgroup.com
Follow EQT on LinkedIn, Twitter, YouTube and Instagram

About thinkproject
Based in Munich, Germany, thinkproject is a global leader in construction intelligence, unlocking the potential of people and information through digital technologies to enable better industry results. It is the leading Europe-based construction and engineering SaaS provider with 2,750 customers, more than 250,000 users in over 60 countries, and over 450 employees.

More info: www.thinkproject.com

About TA Associates
TA Associates is a leading global growth private equity firm. Focused on targeted sectors within five industries – technology, healthcare, financial services, consumer and business services – TA invests in profitable, growing companies with opportunities for sustained growth, and has invested in more than 500 companies around the world. Investing as either a majority or minority investor, TA employs a long-term approach, utilizing its strategic resources to help management teams build lasting value in high quality growth companies. TA has raised $33.5 billion in capital since its founding in 1968 and is committing to new investments at the pace of over $3 billion per year. The firm’s more than 100 investment professionals are based in Boston, Menlo Park, London, Mumbai and Hong Kong.

More info: www.ta.com

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CITIC Capital and Caixin Global Led Consortium Announces Full Exit from its Investment in Leading Market Intelligence Provider, ISI Emerging Markets Group

Citic Capital

CITIC Capital and Caixin Global Led Consortium Announces Full Exit from its Investment in Leading Market Intelligence Provider, ISI Emerging Markets Group

(Hong Kong, 16 November 2020) CITIC Capital Holdings Limited (“CITIC Capital”) announced today that a consortium led by its private equity arm and Caixin Global has agreed to a full exit from its investment in ISI Emerging Markets Group (“ISI”) through a sale to Montagu, a leading European private equity firm. Completion of the sale is expected next month, subject to customary closing requirements.
ISI Emerging Markets Group is a leading provider of critical, hard-to-obtain macroeconomic, company and industry digital intelligence for the emerging markets. Subsequent to the carve-out from Euromoney Institutional Investor Plc in 2018 led by CITIC Capital and Caixin Global, the two brands CEIC and EMIS, were successfully integrated under ISI Emerging Markets Group, providing access to 220 million pieces of content from over 6,000 high-quality sources and available in over 15 languages to customers across the globe.

Yichen ZHANG, Chairman & CEO of CITIC Capital said: “We are delighted to have supported ISI’s management team through a period of strong financial performance and organizational development. During our investment, we worked closely with the team to continue to expand ISI’s technology capabilities, product offering and organization, and to deliver robust growth in its subscription numbers, revenue and profitability. With the support from CITIC Capital and Caixin Global, the company also expanded its sales network and enhanced its data coverage, particularly in the rapidly growing China market. ISI has successfully built a resilient business as proven in the global pandemic environment.”
He added: “ISI is another great example of how we unlock value in carve-out deals. Having completed seven carve-outs in recent years, we moved quickly to fully integrate and realize significant synergies between the CEIC and EMIS businesses. We believe the company is well on track to deliver significant future growth.”

HU Shuli, Chairwoman of Caixin Global said: “In the changing world and amid China’s opening of its capital markets, Caixin is devoted to building a financial information and data platform based in China with global impact. Our cooperation with ISI during this time has been effective, particularly as we have brought CEIC deeper into the Chinese market, and brought new opportunities for its development and operation on mobile platforms. We will continue to keep working with ISI and develop the good relationship. Meanwhile, Caixin will continue investing and empowering global data and research institutions. ”

ISI, alongside Focus Media, Omnivision and UCO, is one of the TMT companies invested in by CITIC Capital Partners. These companies have outperformed despite the pandemic. CITIC Capital believes that this space is one of the most active and exciting sectors in China, and will continue to invest in and to focus on opportunities in this area.
– End –

Note: HSBC is acting as sole financial adviser and Gibson, Dunn & Crutcher UK and White & Case are acting as legal advisers to CITIC Capital on the transaction.

About ISI Emerging Markets Group
ISI Emerging Markets Group has been providing world class data, analysis, and research on emerging markets for over 25 years. ISI is comprised of two brands, CEIC and EMIS, which provide critical macroeconomic, company, and industry information under a subscription-based model. ISI has over 540 employees based in 19 offices across the globe.

About CITIC Capital
Founded in 2002, CITIC Capital Holdings Limited is an alternative investment management and advisory company. The firm manages over USD32 billion of capital across 100 funds and investment products through its multiple asset class platform covering private equity, real estate, structured investment & finance, and asset management. CITIC Capital has over 150 portfolio companies that span 11 sectors and employ over 770,000 people around the world.

CITIC Capital’s private equity arm, CITIC Capital Partners, focuses on control buyout opportunities globally and has completed over 70 investments since inception across China, Japan, U.S., Europe, etc. CITIC Capital Partners currently manages USD7.6 billion of committed capital. For more information, please visit www.citiccapital.com.

About Caixin Global
Caixin Global is one of the most respected sources of macroeconomic, financial and business intelligence on China. Built on Caixin Media’s award winning journalism, Caixin Global delivers fast, reliable business and financial news about China to the world. It offers its English news via a 24/7 digital and mobile platform (caixinglobal.com), and runs a print magazine.
Caixin Global also has an intelligence arm that offers policy analysis, industry monitoring, in-depth research and financial databases with insight into China’s economic policy-making and its financial markets. It organizes a series of high-level global events, including Caixin Roundtables and the Caixin Summit. For more information, please visit www.caixinglobal.com.

For media enquiries, please contact:

Cindy TAM
Director, Corporate Relations
CITIC Capital Holdings Limited
Tel: +852 3710 6813
cindytam@citiccapital.com

Irene GAO
Senior Associate, Corporate Relations
CITIC Capital Holdings Limited
Tel: +852 3710 6814
irenegao@citiccapital.com
irenegao@citiccapital.com

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KKR Invests in CMC Machinery to Drive Innovation in Sustainable Packaging

KKR

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KKR Invests in CMC Machinery to Drive Innovation in Sustainable Packaging

November 16, 2020

Investment is part of KKR’s Global Impact strategy, helping deliver commercial solutions to significant societal challenges

LONDON–(BUSINESS WIRE)–

Leading global investment firm KKR today announced an investment in CMC Machinery, a manufacturer of automated packaging solutions in Italy. Financial details of the transaction were not disclosed.

Founded in 1980 and headquartered in Città di Castello, CMC Machinery is a premium provider of innovative e-commerce 3D on-demand packaging, using advanced end-of-line technology to improve environmental impact by reducing the consumption of packaging materials. The company is led by the Ponti family and employs a team of approximately 200 based in the Umbria region, specializing in the design and manufacturing of advanced automated packaging solutions for some of the world’s largest retail and logistics companies.

Following KKR’s investment, CMC Machinery will continue to be led by the Ponti family and headquartered in Città di Castello, with Founder Giuseppe Ponti’s sons, Francesco and Lorenzo Ponti, serving as CEO and COO respectively.

The on-demand packaging market has seen strong growth over the past few years in response to the surge in the e-commerce sector as more people around the world shift to purchasing items online, a trend accelerated by the impact of COVID-19. With volumes expected to grow even further, the environmental sustainability of the related activities is a critical area of focus. CMC Machinery’s innovative 3D technology is market-leading, offering sustainability benefits by producing on-demand custom made boxes that fit the product size, resulting in significant reduction of raw material and void filler used.

Giuseppe Ponti, Founder, President and Strategic Business Development Director of CMC Machinery, said: “We are very pleased to have KKR on board as an investor with a shared vision to inspire the future of packaging and e-commerce. With KKR’s support, we are excited to continue on our journey, expanding our operations which will remain firmly rooted in the Umbria region to address an increasingly global market with sustainable packaging solutions.”

Stanislas de Joussineau, Director at KKR and Head of Global Impact in EMEA, said: “CMC Machinery’s market-leading innovation in sustainable packaging aligns well with the objectives of KKR’s mission to invest in companies that are providing solutions to critical challenges. We are excited to have the opportunity to work closely with the Ponti family on this important endeavor to drive innovation and promote sustainability across the global retail sector, particularly at this critical time for the industry as retailers increasingly seek to minimize their impact on the environment.”

Pedro Godinho Ramos, Principal at KKR’s Global Impact team in EMEA, said: “CMC Machinery is recognized as a leader in the sector, a testament to the passion and commitment of the Ponti family and their team, who have seen their factories in Città di Castello grow to supply customers around the world. We look forward to supporting them in scaling even further using KKR’s global platform and resources.”

The investment in CMC Machinery is the fourth in Europe by the KKR Global Impact Fund, following investments in MasterD, the leading vocational training company in Spain, The Citation Group, a leading provider of subscription-based HR and Employment law and Health & Safety services to SMEs in the UK, and Viridor, the UK’s leading recycling and responsible waste management company.

KKR Global Impact is focused on identifying and investing behind opportunities where financial performance and societal impact are intrinsically aligned. Specifically, the Fund is focused on generating risk-adjusted returns by investing in companies that contribute measurable progress toward one or more of the United Nations Sustainable Development Goals (“SDGs”). CMC Machinery’s business directly contributes toward SDG #12 (Responsible Consumption and Production) as their innovative packaging solution fits boxes to product size, enabling their e-commerce clients to use less material inputs, reducing waste.

In Italy, KKR has invested over €2.5bn across private equity, infrastructure and other asset classes, with investments including Selecta, MM and Sirti, employing 17,000 people across its portfolio companies. The firm has a long track record of working with entrepreneurial owners and founder-backed businesses across Europe, supporting these companies with the next stage of their growth ambitions by providing financial and operational expertise as well as access to KKR’s global network and resources.

-ends-

About CMC Machinery

Based in Città di Castello, Italy, CMC Spa is a privately held company that designs, manufactures and supports the most innovative and disruptive technology for the mailing, graphic arts, ecommerce and logistics industry. Founded in 1980, the company has focused on strategies to retain customers becoming their sole supplier for technology, service, parts and professional technical training. CMC has always been on track to timely respond to the ever-changing market requirements with creative design engineering and bespoke solutions. With the ecommerce surge reshaping the parcel industry, today CMC is helping retailers and logistics company to optimise their fulfilment process and deliver sustainable, strong, highly personalised and safe boxes through the much acclaimed and multi award winning CMC 3D right sizing packaging technology. For additional information about CMC please visit CMC’s website at www.cmcmachinery.com

About KKR

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, credit and real assets, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

Media:
KKR: Italy
Pasquo Cicchini
Community Group
pasquo.cicchini@communitygroup.it

KKR: International
Alastair Elwen / Alice Neave
Finsbury
+44 (0)20 7251 3801
kkr@finsbury.com

Source: KKR

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Bain Capital Real Estate and Magnolia Capital Form Joint Venture to Invest in Multifamily Housing

BainCapital

November 16, 2020

BOSTON, MA and CHICAGO, IL, November 16, 2020 – Bain Capital Real Estate and Magnolia Capital today announced the formation of a joint venture to pursue opportunities to acquire, renovate and operate value-added multifamily housing in primary and secondary markets throughout the U.S.  The joint venture launches with the objective of deploying $900 million of gross capital over the next several years.

Bain Capital Real Estate and Magnolia Capital will initially focus on acquisitions in compelling Sunbelt markets, with a plan to purchase multifamily properties that have a “value-add” component, including executing capital upgrades to unit interiors, building exteriors and amenity spaces, and improving property operations through proactive asset and property management strategies.  The venture will target well located, garden-style properties constructed between 1975-2000 with a rent profile that serves a middle income demographic.

“We believe this is a compelling opportunity to invest in markets where employment is expanding and at a time when multifamily housing in established neighborhoods continues to present attractive underlying fundamentals,” said Kavindi Wickremage, a Managing Director at Bain Capital Real Estate.  “Our partnership with Magnolia Capital is rooted in our thesis that there is a long-term need for middle income housing, particularly in growing U.S. markets where housing affordability continues to worsen. We look forward to a productive and lasting partnership as we seek to increase the availability of housing that features compelling amenities at affordable price points.”

“Bain Capital Real Estate has a long-standing reputation as a thoughtful, value add investor which shares our conviction for the multifamily housing space,” said Maxwell Peek, Founder, CEO & Managing Principal at Magnolia Capital.  “We are excited to join forces as we launch this well-capitalized and differentiated partnership.  Magnolia Capital has built an institutional, data driven investment platform with extensive multifamily expertise.  We are appreciative of the opportunity to partner with Bain Capital Real Estate, and together look forward to executing on our investment strategy to acquire and operate institutional-quality multifamily housing in demand-driven growth markets throughout the U.S.”

Incubation Capital Partners advised the parties to this venture with capital placement services.
About Bain Capital Real Estate
Bain Capital Real Estate was formed in 2018 and pursues investments in often hard-to-access sectors underpinned by enduring secular trends that drive long-term demand growth for real estate assets and services.  The Bain Capital Real Estate team has been executing its strategy since 2010 (formerly as a part of Harvard Management Company), having invested over $4 billion of equity in over 400 assets across multiple sectors.  Bain Capital Real Estate focuses on small to mid-sized assets where the team applies its deep industry expertise to accelerate impact and drive operational improvements. Bain Capital Real Estate’s strategy aligns with the value-added investment approach that Bain Capital pioneered and leverages the firm’s global platform and significant experience across asset classes to further bolster its insights and sourcing capabilities.

About Magnolia Capital Group 
Magnolia Capital is a vertically integrated real estate investment firm focused on identifying and creating value within the multifamily investment space.  The company’s founding principals have a distinctive blend of institutional real estate investment experience combined with a deep knowledge of technology and operational efficiencies.  Magnolia currently manages over $1.8 billion of real estate, representing 6,600+ units in fourteen markets across the United States.  For more information please visit www.magnoliacap.com.

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Sendcloud raises €12.6 million in Series B funding to expand its all-in-one shipping platform for e-commerce

AXA

Scale-up plans recruitment of 200 new employees to accelerate growth
November 16th 2020, London – Sendcloud, the leading e-commerce shipping platform in
Europe, today announced it has closed a €12.6 million Series B Round. The new investment
will enable the company to open up the global delivery market by enhancing its international
expansion and ongoing development of the international shipping platform. The funding round
was led by AXA Venture Partners with participation from existing investors BOM, Bonsai
Partners and accompanied by a loan from Rabobank. Prior investors also include HenQ, TiiN
Capital and Startupbootcamp.

With the full support of investors, Sendcloud will continue to expand its vision to strengthen
the market position of online stores by optimizing their shipping- and returns process. This
streamlined process reduces the costs of shipping for online stores and helps them to meet
consumers’ demands, enabling them to compete with larger e-tailers on a global scale.
Sendcloud offers 50+ integrations, including all leading e-commerce platforms and
marketplaces like Amazon, Etsy, Shopify, WooCommerce and Wix. The all-in-one shipping
platform is currently active in 8 European countries, of which the latest is the UK, Europe’s
largest e-commerce market.

Over the past years the Dutch scale-up has made huge steps in simplifying the shipping
process for online retailers. However, growing parcel volumes and increasing customer
demands create new challenges in the field of e-commerce logistics. A global shipping network
will contribute to opening up the complex delivery market for all, providing online stores of all
sizes with the tools to compete against the e-commerce giants.

The funding enables Sendcloud to integrate more local and global carriers and further
automate the shipping process, allowing consumers to choose their desired delivery option no
matter where they live. The investment builds on an exceptional year for Sendcloud, due to
the explosive growth in e-commerce and the recent expansion to the UK. To support the
sudden increase in customers, the company has grown from 120 to 260 employees in just one
year. The new funds will be used to hire 200 new employees to accelerate this rapid growth
and enter new markets.

“We first spoke to the Sendcloud team over three years ago and they have continually
delivered on their plans, we are excited to support their continued international expansion with
this growth investment,” said Imran Akram, General Partner of AXA Venture Partners (AVP).
“Over the past few years, Sendcloud has evolved into a mature shipping solution that helps
online retailers to compete with major e-commerce companies. Due to the explosive growth
of e-commerce and increasing customer demands, we see new opportunities to further
improve the shipping experience,” said Rob van den Heuvel, CEO and Co-founder of
Sendcloud. “By hiring talented people, we can realize our ambitions to simplify cross-border
shipping and take e-commerce businesses to new heights.”

About Sendcloud
Sendcloud is an all-in-one shipping platform for e-commerce businesses that want to scale. It
is our mission to empower online retailers to compete by optimizing the full shipping journey
from checkout to returns. Our solution turns e-commerce logistics from a bottleneck into an
accelerator, making shipping a competitive advantage.
Founded in the Netherlands in 2012, Sendcloud has quickly become one of the fastest growing
scale-ups and leading shipping solutions in Europe, with more than 15,000 customers across
the UK, France, Germany, Spain, Italy, Belgium and Austria. Customers range from small to
enterprise-sized online retailers and in industries from fashion and electronics to food & drink.
Technology is at the heart of Sendcloud. With a SaaS-model as a starting point, the company
has evolved over the years from a simple API to an all-in-one platform that automates the
entire shipping process. From choosing multiple carriers to automating returns, Sendcloud
makes shipping a virtue of necessity. Our passion for tech drives us to improve our platform
everyday to ensure retailers and consumers can count on the best shipping solution ever. By
optimizing the shipping process for retailers, the consumer experience is taken to a higher
level. As a result, handing over a parcel is no longer a simple business transaction, but part of
the customer experience, creating a win-win situation for both online retailers and consumers.

About AXA Venture Partners (AVP)
AXA Venture Partners (AVP) is a global venture capital firm investing in high-growth,
technology enabled companies. AVP has built, in less than five years, a unique investment
platform specialized in tech investments with $800 million of assets under management
through three pillars of investment expertise: early stage, growth stage, and fund of funds. To
date, AVP has invested in more than 45 companies and more than 20 funds. The AVP team
operates globally with offices in San Francisco, New York, London, Paris, and Hong Kong.
Beyond investments, AVP provides unique access to business development opportunities
helping portfolio companies to scale globally and accelerate their growth. More details
here: www.axavp.com

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Creation of the European Paytech Leader

Hellman & Friedman

MILAN, Italy / COPENHAGEN, Denmark

A Powerful Strategic Combination Between Next and Nets

Binding framework agreement signed for all-share merger

  • Transformational combination with Nets, resulting in the creation of the European PayTech leader following the recently announced SIA merger
  • Substantial platform at scale. Extensive reach across >25 countries, with presence in most attractive, fast-growing and under-penetrated European markets
  • Full portfolio of solutions with key strengths in acquiring and e-commerce, underpinned by superior technology stack and capabilities across payment rails
  • Significant value creation opportunities for Nexi shareholders, with run-rate recurring cash synergies estimated at c.€170 million p.a., in addition to c.€150 million p.a. estimated for the SIA merger. 2022
  • Cash EPS accretion >25% expected for Nexi shareholders, assuming closing of both Nets and SIA transactions
  •  c.€2.9 billion revenues and c.€1.5 billion EBITDA on a pro-forma aggregated basis in FY 2020E, including run-rate synergies
  • Superior profitability and cash generation at scale, with enhanced business resilience stemming from geographic diversification, e-commerce exposure and significantly lower customer concentration
  • All-share merger on the basis of equivalent 2020E EV / EBITDA multiples, implying an enterprise and equity value for Nets of €7.8 billion and €6.0 billion, respectively. No incremental debt raised to fund the combination of Nexi and Nets
  • Nets shareholders to receive 406.6 million newly issued Nexi shares, resulting in a pro-forma ownership of 39% in Nexi + Nets (or 31% when considering Nexi + Nets + SIA). Existing Nexi shareholders to own 61% in Nexi + Nets (or 48% when considering Nexi + Nets + SIA)
  • Transaction supported by reference shareholders of both Nexi and Nets, who will remain invested in the combined group. Lock-up mechanism in place for Nets shareholders

15 November 2020 – Following the announcement made on 2 November 2020, Nexi, the PayTech leader in Italy, and Nets, a leading integrated Pan-European PayTech player, active in 20 countries and controlled by a consortium of private equity firms led by Hellman & Friedman (“H&F”), announce today that they have signed a framework agreement (“FA”) regarding the combination of the two groups through an all-share merger (the “Merger”).

The Merger, which is consistent with the consolidation process underway at European and global level in the digital payments sector, follows last month announcement by Nexi of the signing of a Memorandum of Understanding in relation to the strategic combination between Nexi and SIA, which is independent of the Merger. The two transactions are not linked with each other but will each contribute to the ambition of creating a true European PayTech leader.

Upon closing of the two transactions, the new combined group encompassing Nexi, Nets and SIA (the “New Group”) will become one of the European PayTech leaders with the scale, reach and breadth of capabilities to drive from a leading position the transition to digital and cashless in Europe. The New Group will offer enhanced future-proof innovative payment solutions across payment rails and channels, underpinned by a best-in-class technology stack and professional capabilities. It will leverage a strong complementary presence across both the most digitally-advanced and under-penetrated geographies in Europe. The New Group represents a winning platform that will be ideally positioned to further drive new partnerships with banks and merchants in-market and across Europe. The CEO of Nexi, Paolo Bertoluzzo, commented: “The transaction, which follows the announced MoU for the merger with SIA, creates the European PayTech leader with unique scale and capabilities to best serve and support all our customers across Europe, from citizens to merchants, from partner banks to corporates, from public administration to other institutions. Nexi will transform into a European leader with access to a fourfold larger addressable market, still largely unpenetrated and growing double digit. The New Group, with reach in over 25 countries, will act as digitalization engine in Europe, driving the transition to digital and cashless.

Nexi people, together with our reference shareholders, are at the same time truly inspired by the vision of the New Group and deeply committed to this new powerful step in our value creation journey. We are excited to join forces also with the highly talented people of Nets, who are driving such an effective transformation of their company. This combination of passionate and highly competent professionals in the New Group has the true potential to fuel innovation in the payment industry across Europe for years to come.”

The CEO of Nets, Bo Nilsson, commented: “This transaction marks an important milestone in Nets’ journey to become a European payments champion, from our beginning as a domestic player in Denmark and Norway to our evolution into a pan-European payments pure-play operator. Through constant innovation, and driven by the tremendous efforts of colleagues, Nets has re-shaped the Nordic and broader European payments landscape, in creating ever more valuable solutions for our customers and stakeholders. We are incredibly excited to join forces with Nexi, with whom we will continue to shape the industry and capture significant growth opportunities across the sector through our presence in structurally attractive payment markets such as Germany, Austria, and Switzerland, as well as in the fast growing Polish market. Denmark and the Nordics remain a key focus for the group, drawing on the expertise Nets has built in serving one of the most digitally advanced regions in Europe. Today’s announcement is a true testament to the capability and dedication of everyone at Nets.”

Nets’ business profile
Headquartered in Denmark, Nets is one of the largest integrated Pan-European PayTech companies with leadership position in the Nordics, one of the most digitally advanced regions globally, as well as in underpenetrated geographies with significant growth potential (such as Germany, Austria, Switzerland, Poland and Southern Eastern Europe).

Through its two business units (Merchant Services and Issuer & eSecurity Services), Nets serves over 740,000 merchant RGUs, over 40 million cards and more than 250 financial institutions and handles over €125 billion card payments annually in the acquiring segment. Furthermore, Nets has developed a strong multi-regional e- commerce offering over the last three years.

Nets was formed in 2010 through the merger of three Nordic payments companies: Denmark’s PBS and Norway’s BBS and Teller. With the acquisition of the leading Finnish digital payments provider Luottokunta in 2012, Nets became the leading pan-Nordic payments player.

Over the past 3 years, under Hellman & Friedman’s ownership, Nets has undergone significant transformation and investments resulting in accelerated growth of its core business, both organically and through strategic M&A. Most recently this included the 2018 merger with Concardis which expanded Nets’ footprint to structurally attractive payment markets such as Germany, Austria, and Switzerland, as well as the expansion into the fast growing Polish market through the acquisitions of Dotpay/eCard, P24, and PeP. Following the sale of Nets’ Corporate Services account-to-account business (“Corporate Services”) to Mastercard for €2.85bn, which is expected to close in Q1 2021, Nets’ model has been successfully refocused on its core businesses, i.e. Merchant Services (62% of 2019 revenues), with a strong e-commerce exposure and proposition, and Issuer & eSecurity Services (38% of 2019 revenues),5 with key strengths in issuing processing and innovative digital payments methods.

Nets generated €1.1 billion in revenues and €387 million in EBITDA in 2019 pro-forma for the sale of the Corporate Services division and recent acquisitions in Poland, with an organic underlying revenues growth of c.8% YoY in 2019. Nets also recorded solid and resilient performance in 2020 despite Covid-19, with organic underlying revenues7 in Q3 growing c.4% YoY.

Creation of the European PayTech leader
The combination of Nexi with Nets is a game-changer in the European payments landscape creating one of the largest players in Europe with enhanced scale, client reach, distribution network and breadth of offering, which will further benefit from the recently announced SIA merger. A powerful strategic combination that will allow the New Group to:

  • Create the largest pan-European platform with the scale to drive superior product and efficiency leadership, with c.€2.9 billion revenues and c.€1.5 billion EBITDA on a pro-forma aggregated basis for FY 2020E, including run-rate synergies;
  • Benefit from significant growth potential from leadership and exposure to attractive European markets (ranging from fast-growing Italy to the structurally attractive Germany/DACH and Poland/CSEE regions to the highly advanced and innovative Nordic markets), with an overall addressable market expanded 4x vs. Nexi standalone to €4.6tn in terms of consumer spend and with an average digital payments penetration of 33%;
  • Leverage a full portfolio of solutions across the payment ecosystem, with strong competences in acquiring and e-commerce, and the ability to support international merchants with vertical-specific solutions based on flexible customer journeys across countries, payment channels and rails;
  • Create a best-of-breed technology platform leveraging on complementarity and scale, underpinned by €300m IT & innovation spend per year and >3k product and tech development specialists;
  • Achieve superior profitability and cash generation at scale, with enhanced business resilience stemming from geographic diversification, e-commerce exposure and significantly lower customer concentration;
  • Be uniquely positioned to capture further organic and inorganic growth opportunities across Europe.

Synergies and value creation
In addition to ~€150 million p.a. of recurring cash synergies from the recently announced SIA merger, the combination of Nexi and Nets is expected to provide significant value creation opportunities from highly visible and properly phased ~€170 million of estimated run-rate recurring cash synergies, of which:

  •  ~€95 million in lower operating expenses through rationalization of IT and tech platforms together with the creation of shared services and competence centers, and central procurement;
  • ~€60 million in revenue synergies, of which €40 million at EBITDA level, from cross-selling of digital solutions to SMEs, enhanced e-commerce and omni-channel proposition for local, regional and international merchants, increased penetration in attractive verticals and upselling to a value-added service model for national and international banks;
  •  ~€35 million in recurring capex synergies through product development at scale, joint investment planning and best-of-breed technology platforms consolidations;
  • 80% of EBITDA synergies are expected to be achieved by year 2024;
  • Total integration costs estimated at ~1x total recurring annual cash synergies.

The combined ~€320 million p.a. of recurring cash synergies from Nets-SIA represent a significant value creation opportunity for Nexi shareholders, with 2022 Cash EPS accretion estimated >25% including run-rate synergies (and c. 15% on a phased-in basis) assuming closing of both Nets and SIA transactions.

Taking into account the estimated synergies, the envisaged combination of Nexi with Nets and SIA is expected to benefit from pro forma aggregate revenues as of 2020E equal to €2.9 billion, EBITDA of €1.5 billion and Operating Cash Flow of €1.2 billion.

Integration and synergy delivery plan
A clear, focused and properly phased integration and synergy delivery plan has been defined for both Nets and SIA, taking into account the fact that the areas of overlap in the efforts across Nexi-Nets and Nexi-SIA are limited. Nexi-Nets synergies are mainly focused on merchant services for revenues and on outside of Italy for costs; Nexi-SIA synergies are mainly focused on issuing and digital banking & corporate solutions for revenues and on Italy only for costs.

Initially, Nets management will remain focused on delivering Nets’ highly accretive standalone growth plan, while from 2021 Nexi-SIA integration will start with full focus on Italy. Later from 2022 the Nets integration will also start with the longer term goal of creating One European Platform.

At the same time, from the very beginning, a focused set of joint fast-track initiatives will be launched to make sure that value creation from synergies starts immediately from closings. These initiatives will focus on delivering one European e-commerce and multichannel proposition, one SME next generation proposition, one technology plan, immediate joint resource planning (opex and capex) and purchasing.

This focused and phased transformation program will be led by a highly experienced management team. At the same time, the breadth and depth of seniority and talent within Nexi, Nets and SIA will guarantee the continued total focus on delivering growth and development of the ordinary activities of each business while the transformation is executed.

Transaction structure
The framework agreement envisages a merger of Nets into Nexi on the basis of equivalent 2020E expected EV
/ EBITDA multiples. The strategic combination will be executed as an all-share merger whereby Nets’ shareholders will receive about 406.6 million new Nexi shares, resulting in a pro-forma ownership of 39% in Nexi + Nets (or 31% when considering Nexi + Nets + SIA). Nexi shares issued to Nets’ shareholders will be subject to a lock-up mechanism of up to 24 months post-closing, with 1/3 locked up for 6 months, 1/3 locked up for 12 months and the remaining 1/3 locked up for 24 months.

Under the terms of the Merger, Nets is valued at an enterprise value of €7.8 billion and an equity value of €6.0 billion, based on Nexi’s share price equal to €14.71 as of 13th November 2020, resulting in an implied EV/EBITDA 2020E of ~20x. In addition, a potential earn-out of up to €250 million will be payable in newly issued Nexi shares in 2022, contingent on the 2021 EBITDA performance of Nets (at a significantly lower implied multiple).

The execution of the Merger does not require additional new debt and the about €1.5 billion of Nets’ financial debt to be refinanced at closing is already backed by a committed bridge facility granted by a pool of primary international banks. Nexi keeps its commitment to maintain a prudent capital structure and consistent financial policy.

The transaction carries the full support of the reference shareholders of both Nexi and Nets, who will remain invested in the New Group. Intesa Sanpaolo, existing large shareholder in Nexi as well as established partner for both Nexi and Nets, also expressed its full support to the combination with Nets as well as its strategic relevance and rationale.

Upon closing of Merger, Hellman & Friedman would own 21%, Advent International & Bain Capital 13%, Mercury UK 12%, Intesa Sanpaolo 6%, GIC Private Equity 4%, with a free float of 44%.

Upon closing of the Merger and the envisaged SIA merger, CDP would own 17%, Hellman & Friedman 16%, Advent International & Bain Capital 10%, Mercury UK 10%, Intesa Sanpaolo 5%, GIC Private Equity 3%, with a free float of 38%.

The New Group will remain listed on the Italian Stock Exchange.

Governance
Upon Closing, Group Board of Directors will be chaired by Michaela Castelli, current Nexi Chair. The New Group will be led by the current Group CEO of Nexi, Paolo Bertoluzzo, as Group CEO. The current Group CEO of Nets, Bo Nilsson, will become non-executive Board member of Nexi and Chairman of Nets.
Hellman & Friedman will appoint also another Board member as a result of the transaction.

Approvals and conditions
The Merger has been approved by the Nexi’s Board of Directors following also the issuance of the favourable opinion of the Company’s Committee for Related Party Transactions.

The Merger with Nets is independent of the envisaged combination with SIA, where confirmatory due diligence and documentation preparation are ongoing; signing of binding documentation for the SIA merger is also expected to incorporate the adjustments to be made to reflect the effects of the Nets transaction. The Nets and SIA transactions envisage sequential antitrust review processes, starting with the Nets merger, which is intended to close earlier.

Nexi EGM and related whitewash vote to approve the Merger is expected to take place in Q1 2021 and the execution of the merger deed with Nets is anticipated in Q2 2021, following regulatory approvals.
The SIA transaction is expected to be completed in Q3 2021.

Closing is also subject to the satisfaction of the conditions set out in the FA which include, amongst others, relevant merger control and other regulatory approvals as well as the completion of the sale of Nets’ Corporate Services to Mastercard.

* * *

Nexi is advised by HSBC, Centerview, BofA Securities and Goldman Sachs as financial advisors. Legance – Avvocati Associati and Linklaters are acting as legal counsels, Bain&Co and Alix as industrial advisors, PWC as due diligence advisor for financial and accounting matters and KPMG for tax matters. Nexi’s Committee for Related Party Transactions is advised by Lazard and Prof. Gabriele Villa as financial advisors and Studio Legale Galbiati, Sacchi e Associati as legal counsel.

Credit Suisse and J.P. Morgan are acting as lead financial advisors to Nets with Deutsche Bank and Morgan Stanley acting as additional financial advisors. Freshfields Bruckhaus Deringer are acting as legal counsel, and Ernst & Young as due diligence advisors for accounting and tax matters.

Mercury UK is advised by Mediobanca, Citi and Barclays as financial advisors and by Pirola Pennuto Zei & Associati as tax advisor.

* * *
Conference call
On November 16th, 2020 at 8am CET Nexi will host a conference call. Link for the registration:
CLICK HERE

The presentation and the replay of the conference call will be available on the Company website at https://www.nexi.it/en/investor-relations/presentations-announcements.html

* * *

This press release contains forecast information which hence are, as such, uncertain. The forecast information are based on various assumptions, expectations, projections and forecast data relating to future events and subject to multiple uncertainties and other risk factors out of the control of Nexi and/or Nets and/or the other parties to which they belong. Several factors exist which may lead to results and trends significantly different from the implied or express contents of the forecast information and, thus, such information do not amount to a reliable indicator of future performance. Nexi, Nets and the other parties mentioned in this press release undertake no obligation to publicly update or review the forecast information as a consequence of new information, future events or other reasons, except where required by applicable law.

* * *

The signing of the binding framework agreement for the Merger represents a related party transaction pursuant to Consob Regulation no. 17221/2010 (“Consob Regulation”) and internal Nexi policies (“Nexi Policies”). The Merger qualifies as a transaction of major relevance in light of the exceeding of the thresholds identified by the Company pursuant to art. 4, par. 1, let. a) of the Consob Regulation. Accordingly, the Nexi’s Committee for Related Party Transactions released unanimously a non-binding favourable opinion pursuant to Nexi Policies and Nexi will publish, within the terms provided for by law, the informative document pursuant to art. 5, paragraph 1, of Consob Regulation.

 

Nexi
Is the leading PayTech Company in Italy, listed on MTA of Borsa Italiana. We operate in strong partnership with ~150 partner banks. Our integrated end-to-end omni-channel technology connects banks, merchants and consumers enabling digital payments. We help simplify payments for our clients and digitalize the Italian economy. Nexi operates in three areas: Merchant Services & Solutions, Cards & Digital Payments and Digital Banking Solutions:

Merchant Services & Solutions: Nexi, together with its partner Banks, serves ~ 900,000 merchants;

Cards & Digital Payments: Nexi, together with its partner Banks, manages 41.6 million payment cards

Digital Banking Solutions: Nexi manages 13,100 ATMs, approximately 469,000 e-banking workstations and 947 million clearing transactions in 2019. It has also developed, as a technological partner, the open banking system of CBI S.c.p.a. to which the main Italian banks have already joined.

Nets
At Nets, we see easier products and solutions as the foundation for growth and progress – both in commerce and society. With headquarters in Copenhagen, Denmark, and more than 4,000 employees located across Europe, we help financial institutions, businesses and merchants across Europe make tomorrow a little easier for their customers while delivering unrivalled security and stability. Powering payment solutions for an easier tomorrow. www.nets.eu

Nexi – External Communication & Media Relations
Daniele de Sanctis
daniele.desanctis@nexi.it
Mobile: +39 346/015.1000
Direct: +39 02/3488.4491

Matteo Abbondanza
Matteo.abbondanza@nexi.it
Mobile: +39.348/406.8858
Direct: +39 02/3488.2202

Nexi – Investor Relations
Stefania Mantegazza
stefania.mantegazza@nexi.it
Mobile: +39.335/580.5703
Direct: +39 02/3488.8216

Barabino & Partners
Media Relations
Office: +39 02/72.02.35.35
Sabrina Ragone – s.ragone@barabino.it
Francesco Faenza – f.faenza@barabino.it

Nets – media contact
Søren Winge
Head of Media Relations Mobile: +45 29 48 26 46
Email: swing@nets.eu

 

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KKR and Rakuten to Acquire Stakes in Seiyu from Walmart, Focus on Accelerating Digital Transformation of Japanese Retail: Seiyu Positioned to Become Japan’s Leading Omnichannel Retailer

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KKR

November 15, 2020

  • KKR to purchase majority stake and new Rakuten subsidiary to acquire minority stake in Seiyu
  • Walmart to retain 15% stake and work with KKR and Rakuten to accelerate Seiyu’s digital transformation to become Japan’s leading omnichannel retailer
  • The complementary retail expertise KKR and Rakuten bring, including track records of driving growth in e-commerce and digital marketing platforms across the globe, will help Seiyu become the local, innovative, value retailer of choice
  • This transaction reflects Walmart’s commitment to building strong, local businesses by bringing together the right parties in the right structure to meet unique market needs

TOKYO & BENTONVILLE, Ark.–(BUSINESS WIRE)– Walmart Inc. (“Walmart”), KKR & Co. Inc. (“KKR”) and Rakuten, Inc., (“Rakuten”) today announced the signing of definitive agreements under which KKR will purchase a majority stake and a new Rakuten subsidiary will purchase a minority stake in Seiyu GK (“Seiyu” or the “Company”) in a deal valuing the business at ¥172.5 billion (approx. $1.6 billion).

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201115005157/en/

Under the terms of the agreements, KKR will acquire a 65% stake in Seiyu, and Rakuten will acquire a 20% stake, through a newly created subsidiary focused on retailer digital transformation. Walmart will retain a 15% stake in Seiyu. The new ownership structure enables Seiyu to take advantage of KKR, Rakuten and Walmart’s combined retail expertise and innovation as a standalone company and accelerate its digital transformation to further benefit both Seiyu’s customers and business partners.

KKR, Rakuten and Walmart are committed to supporting Seiyu’s growth and this unique ownership structure reflects a shared belief in Seiyu’s long-term strategy in Japan. Last year, Seiyu launched an ambitious strategy to accelerate growth through a more concerted focus on providing value, fresh produce and digital convenience to customers. The Company has already met or exceeded operational and financial goals across key areas, including market share, customer satisfaction, associate engagement and financial performance. Together, the three companies look to bring complementary strengths to build on Seiyu’s momentum and support its efforts to become Japan’s leading omnichannel retailer.

KKR and Rakuten’s investment in Seiyu is further intended to deliver a range of substantial benefits over time for the Company’s customer base, including:

  • Accelerated investment in digital channels to facilitate app-based shopping, payment and delivery services;
  • Introduction of new options for cashless payment;
  • Improved service experience across both online and offline channels; and
  • Enhanced product offering at everyday low prices to stay ahead of its customers’ shopping needs.

KKR will bring its deep expertise in the Japanese market to Seiyu, in addition to its decades-long track record of investing in the subsidiaries of large corporations and empowering them to unlock their potential as successful, independent companies. KKR will further leverage its sector and operational expertise to enhance Seiyu’s retail transformation efforts and will make available its network of advisors, portfolio companies and specialists to create value.

The new ownership structure builds on previously established collaborations between Rakuten and Walmart, including the popular Rakuten Seiyu Netsuper online grocery delivery service and Rakuten Group’s partnership with Walmart that includes ebook service support in the United States. Rakuten will further accelerate digital transformation of Seiyu and other Japanese retailers through its new subsidiary Rakuten DX Solution, leveraging its 100M+ membership base and technology.

Seiyu will continue to have access to Walmart’s global retail best practices, sourcing network and scale to maintain the price leadership and value it provides to customers.

Seiyu CEO Lionel Desclee will continue to lead the business through a transition period, after which he will take on a new role within Walmart. A new Board of Directors comprised of representatives from KKR, Rakuten and Walmart will be formed to focus decision making locally, and plans to appoint a new CEO following the close of the transaction.

Judith McKenna, President and CEO of Walmart International, commented, “This past year has been one of the most extraordinary in Seiyu’s rich 57-year history. Our associates have been exceptional, adapting brilliantly to serve customers at a time when they needed it most and outperforming against an ambitious transformation plan. We have been proud investors in this business over the past 18 years and we are excited about its future under the new ownership structure. Today’s announcement is important because its focus is on bringing together the right partners in the right structure to build the strongest possible local business. We look forward to supporting Seiyu’s growth and success, alongside KKR and Rakuten, as a minority investor.”

Hiro Hirano, Co-Head of Asia Pacific Private Equity and CEO of Japan at KKR, said, “KKR is pleased to invest in the success of Seiyu given the important role it plays in the lives of customers across the country. We are also excited by the prospect of working with Seiyu’s associates, who have dedicated themselves to supporting the business in spite of this year’s unprecedented challenges. We will focus on working closely with Seiyu’s management team and associates and leveraging the expertise of Rakuten and Walmart to enhance the customer experience, meet their ever-changing needs, and make shopping more accessible through digitalization. This investment is a true milestone for KKR in Japan and reinforces our commitment to the market as well as our continuing efforts to champion the long-term success of local businesses.”

Kazunori Takeda, Group Executive Vice President and President of Commerce Company, Rakuten, Inc., said, “By building on our successful partnership on Rakuten Seiyu Netsuper and our deep experience in online retail and data-based marketing, we look forward to accelerating digital transformation of Seiyu brick and mortar retail and further merging the best of offline and online retail to offer Seiyu customers the best possible OMO1 customer experience. The planned establishment of Rakuten DX Solution will also allow us to offer digital solutions optimized to transform retail at Seiyu and in new future partnerships with retailers across Japan.”

KKR is making its investment from its Asia private equity fund. The transaction is subject to regulatory approvals and is expected to close in the first quarter of 2021.

About Walmart

Walmart Inc. (NYSE: WMT) helps people around the world save money and live better — anytime and anywhere — in retail stores, online, and through their mobile devices. Each week, over 265 million customers and members visit approximately 11,400 stores under 55 banners in 26 countries and eCommerce websites. With fiscal year 2020 revenue of $524 billion, Walmart employs over 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting https://corporate.walmart.com, on Facebook at https://facebook.com/walmart and on Twitter at https://twitter.com/walmart.

About Seiyu:

Established in 1963, Seiyu is a nationwide supermarket chain in Japan with more than 300 retail units. Through its supermarket and hypermarket formats and Rakuten Seiyu Netsuper delivery service, Seiyu offers customers a broad assortment including fresh food, general merchandise, and apparel products across Japan from Hokkaido to Kyusyu. Offering EDLP to our customers, Seiyu contributes to making their everyday life more convenient as a leading, innovative, local value retailer powered by Walmart, its parent company.

About KKR:

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, credit and real assets, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR Co.

About Rakuten:

Rakuten, Inc. (TSE: 4755) is a global leader in internet services that empower individuals, communities, businesses and society. Founded in Tokyo in 1997 as an online marketplace, Rakuten has expanded to offer services in e-commerce, fintech, digital content and communications to approximately 1.4 billion members around the world. The Rakuten Group has over 20,000 employees, and operations in 30 countries and regions. For more information visit https://global.rakuten.com/corp/.

About Rakuten DX Solution:

A new Rakuten Group subsidiary planned for establishment in January 2021 to support the digital transformation of brick-and-mortar retailers across Japan and to promote the merger of offline and online retail (OMO) in order to serve customers with a seamless and personalized retail experience.

1 OMO: “Online Merges with Offline” refers to breaking down the barriers between online services and offline brick-and-mortar stores in the retail space in order to provide customers with a seamless, personalized experience.

Walmart
Blake Jackson
+1 479 204-1028
blake.jackson@walmart.com

Seiyu
Miyuki Moriguchi
miyuki_moriguchi@walmart.com

KKR
KKR Asia Pacific
Anita Davis
+852 3602 7335
Anita.Davis@kkr.com

Finsbury (for KKR Japan)
Deborah Hayden, +81 70 2492 0463
Hannah Perry, +81 70 3769 9633
FinsburyKKRJapan@finsbury.com

KKR Americas
Kristi Huller, Cara Major, Miles Radcliffe-Trenner
+1 212 750-8300
Media@kkr.com

Rakuten, Inc.
Corporate Communications Department
global-pr@mail.rakuten.com

Source: KKR

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