Wendel, France’s largest publicly traded investment firm, said the value of its assets climbed as shares of companies including Cie. de Saint-Gobain SA rose.
Net asset value a share advanced to 98.6 euros as of March 12, from 76.6 euros on Nov. 22, the Paris-based firm said in a statement late yesterday. The company, the largest investor in building-material supplier Saint-Gobain, said net income fell to 525.4 million euros ($695.5 million) last year from 1 billion euros in 2010 after one-time gains weren’t repeated.
“Wendel was even better able to withstand the challenging monetary and market context since the summer of 2011 in that it has reduced its debt significantly and the companies in the Group have adjusted to an economic environment with very limited visibility,” Chief Executive Officer Frederic Lemoine said in the statement.
Wendel, which was founded by steel industrialists in France in the 18th century, has sought to cut debt after its 2007 purchase of a 17 percent stake in Saint-Gobain left it with little cash for further acquisitions. Lemoine, who became CEO in April 2009 after Jean-Bernard Lafonta clashed with the firm’s founding family, has extended debt maturities and sold assets including shares in Legrand SA to boost cash.
Wendel sold a 14 percent stake in Legrand for 961.5 million euros in the period, leaving it with a 5.8 percent holding in the maker of electrical equipment. The company agreed on Nov. 28 to sell connector maker Deutsch Group SAS to TE Connectivity Ltd. for $2.1 billion. The sale is expected to generate 960 million euros in proceeds, more than double Wendel’s initial investment, the firm said today.
The firm reduced debt by 1.59 billion euros last year, it said today. With the sale of Deutsch, net debt will be reduced to less than 3 billion euros, the company said.
“We’ve decided to maintain our cash between 500 million euros and 700 million euros,” Lemoine said at a press conference in Paris today. With the proceeds of the Deutsch sale, “we’ll have about 1.5 billion euros of cash, which will allow us to keep reducing debt, albeit at a slower pace, and to make investments of bigger sizes” than last year, he said.
New investments will be in the range of 200 million to 500 million euros in equity, with possible co-investors, and a “reasonable” leverage, the Wendel CEO said. That means Wendel may invest in companies with enterprise values of 200 million euros to more than 1 billion euros, Lemoine said, adding that he’s looking at the health-care and unregulated financial industry.
Wendel, which also owns 51 percent of French goods-inspection company Bureau Veritas SA and controls building-material company Materis SA, will pay a dividend of 1.30 euros a share, up from 1.25 euros a share in 2010. Investors will also receive one Legrand share for every 50 Wendel shares.
Wendel may also sell a unit of Materis as soon as this year to help it reduce its debt as it seeks to push back the reimbursement of some Materis loans, Lemoine said.