GROUPE GORGE: Strategic refocusing of activities: Groupe Gorgé plans to sell the Engineering and Protection Systems division and adopt a new identity, Exail Technologies – 24/10/2022 at 18:15


Groupe Gorgé announces its plan to sell its Engineering & Protection Systems division to its main shareholder, the Gorgé family, for a value of the shares of €27 million, implying an enterprise value of €47 million. The group would thus increase its readability and would be focused on robotics and high-tech critical systems, particularly in the naval and maritime fields. On this occasion, Groupe Gorgé would be renamed Exail Technologies, to reflect the completion of its transformation. This sale project has been the subject of a report on the value of the division and on the fairness of the sale price by an independent expert and will be submitted for the approval of the shareholders at a Combined General Meeting which will take place on December 8, 2022.

The final step in group simplification

Initiated in 2018, the strategy of refocusing the group’s activities was deployed through several key stages: the sale of certain subsidiaries positioned in very cyclical sectors (automotive, Oil & Gas), the distribution of Prodways Group securities, the strengthening in ECA Group and recently the acquisition of iXblue. The combination of iXblue with ECA Group (a subsidiary of Groupe Gorgé), has led to the emergence of a world industrial champion in high technology specialized in robotics, maritime navigation, aerospace and photonics, which now operates under a brand unique, Exail ( www.exail.com ) replacing the ECA and iXblue brands.

Groupe Gorgé is now proposing to its shareholders to finalize the simplification of activities with the sale of the Engineering & Protection Systems (ISP) division, i.e. three activities: security doors for the nuclear industry (Baumert subsidiary, 100% owned), Fire Protection (VPI subsidiary, 70% owned) and Engineering and Technology Consulting (SERES subsidiaries, 70% owned, and StedY, 65% owned). This division operates in interesting markets but far from the activities of Exail.

An offer that values ​​the ISP division 25x 2022 EBITDA

The divested activities of the ISP division generated revenue of €87 million in 2021, current EBITDA of €1 million and operating profit of -€3.4 million. The operation proposed by the Gorgé family, through the company Pélican Venture, was subject to a condition precedent relating to obtaining an order in the United Kingdom in the nuclear door business. The sustainability of this activity could indeed have been threatened in the absence of this contract. This condition was lifted on October 20. The offer relates to the entire stake of Groupe Gorgé in the ISP division for a value of the shares of €27 million, implying an enterprise value of €47 million, i.e. 25x the estimated 2022 EBITDA and 8x the Estimated 2023 EBITDA

1

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The offer has been examined by Cabinet Crowe, which carried out an independent expert report, and whose report will be available on the Groupe Gorgé website in the coming days. Its conclusions attest to the fair valuation of the ISP division and the fairness of the terms of the operation for all Groupe Gorgé shareholders.

This proposed sale will be submitted for shareholder approval at a Combined General Meeting to be held on December 8, 2022.

2

. Groupe Gorgé’s Board of Directors unanimously recommends the approval of this transaction, taking into account several elements:

  • the conclusions of the independent expert,

  • the valuation of the ISP division, in line with the latest known comparable transactions,

  • the interest for the group’s shareholders of a rapid completion of the simplification of activities.

Positive impacts for Groupe Gorgé

The transaction would thus make it possible to finalize the simplification of the activities in a single operation which would be carried out by the end of February 2023, subject to the approval of the General Meeting.

This disposal would allow the receipt of €27 million in cash (corresponding to the value of the securities sold from the ISP division) and would have a significant positive impact on the group’s net income. The company’s growth and profitability profile would also be improved.

In addition, the group would benefit from increased visibility, a better profile on the stock markets and could benefit from a better valuation, penalized for many years by the diversity of its activities.

Increased readability and a new identity: Exail Technologies

As part of this operation, Groupe Gorgé proposes to adopt a new identity to reflect the transformation of the group and would be renamed Exail Technologies, thus taking on the name of its main subsidiary. This change of name will be submitted to a vote at the Combined General Meeting and conditional on the acceptance of the sale of the ISP division.

On the strength of this new identity and its simplified activities, Exail Technologies could thus start the year 2023 on a clear basis and focus on the execution of its ambitious plan aimed at generating more than €500 million in revenue and 25 % of EBITDA margin by 2025-2026.

A new solid shareholder for the activities of the ISP division

Pélican Venture is a group of companies created by Jean-Pierre Gorgé in the early 1990s. The main subsidiary of Pélican Venture is Groupe Gorgé (owned at 44% of the capital and 61% of the voting rights). Pélican Venture also became the largest shareholder of Prodways Group in 2021 following the distribution of Prodways Group shares by Groupe Gorgé. Pelican Venture achieved a consolidated turnover of 277 million in 2021, resulting in an operating result of 19 M€ and a net profit of 8.3 M€ group share.

The ambition of Pélican Venture is to continue to develop the companies in the ISP cluster by involving key managers in the industrial, economic and social project of the companies in the cluster.


Appendices

Operating income from divested activities of the ISP division

(in millions of euros)

2021

S1 2022

Turnover

87.4

45.3

Current EBITDA

1

1.0

1.3

Current EBITDA margin (%)

1.2%


2.9%

Operating result

-3.4

-0.4

Operating income

-3.4

-1.4

1

Current EBITDA as published in Groupe Gorgé’s financial statements, including the application of IFRS 16.

Definition of alternative performance indicators

  • Current EBITDA:

    Operating income before “net depreciation and amortization and provisions”, “other operating income” and “share in the results of associates”.

  • Operating result:

    Operating profit before “other items of operating profit” and “share in the results of associates”.

About Groupe Gorgé

Groupe Gorgé is a high-tech industrial group driven by a strong entrepreneurial culture. The Group achieved a turnover of 178 million euros in 2021. It is present in autonomous robotics, engineering and protection systems and now employs nearly 2,000 people.

More information on www.groupe-gorge.com

Groupe Gorgé is listed on Euronext Paris Compartment B (GOE).

contacts:

Investor Relations


Hugo Soussan

Such. +33 (0)1 44 77 94 86

[email protected]

Claire Riffaud

Such. +33 (0)1 53 67 36 79

[email protected]

Media relations


Manon Clairet

Such. +33 (0)1 53 67 36 73

[email protected]


Follow Groupe Gorgé news on:

group-gorge.com

1 Enterprise value appearing in the independent expert’s report based on the net financial debt of the companies in the ISP division estimated as of December 31, 2022. EBITDA multiples are calculated based on the definition of EBITDA current used by Groupe Gorgé outside the application of IFRS 16.

2 In accordance with the regulations, the Gorgé family, main shareholder of Groupe Gorgé (indirectly via Pelican Venture and directly), will not participate in the vote on the proposed sale during the Combined General Meeting and did not take part in the debate and the deliberation relating to this operation during the Board of Directors.


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