Agreement for the sale of the larger non-controlled assets, outcome of third phase strategic review and general meeting convened to consider a revised investment policy allowing for a managed wind-down of the portfolio

04 October 2018

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The Board of Electra today announces:

  • The agreement for the sale of its larger non-controlled assets, Photobox and Knight Square at 103% of adjusted 31st March 2018 carrying value^
  • The outcome of the third phase of its strategic review
  • A general meeting to be held on 30 October 2018 to consider the adoption of a revised investment objective and policy
  • The intention to distribute excess cash as an initial special dividend of £140m (£3.65 per share) in December (subject to the completion of the Photobox transaction and adoption of the revised investment objective and policy) (‘the Initial Special Dividend’), with a subsequent special dividend in respect of the £21m (£0.54 per share) proceeds of the sale of Knight Square (‘the Subsequent Special Dividend’, and together with the Initial Special Dividend, ‘the Special Dividends’). The Subsequent Special Dividend is subject to completion of the disposal of Knight Square, which is conditional on receipt of regulatory approval which is anticipated to be received in the first quarter of 2019
  • Its strategy for the remaining portfolio of assets, of which the value of the two larger corporate investments are both over 97% owned by the Company, with aggregated last 12 months unaudited EBITDA of £31m and net debt of £65m. An additional pro forma £28m of cash will be held by the Company following settlement of the transactions announced today and distribution of the Special Dividends
  • Future distribution policy comprising intended annual dividends of £10m pa pending further material disposals

^31st March carrying value adjusted for subsequent transactions

Commenting on the sale and conclusion of the Strategic Review, Neil Johnson, Chairman of Electra Private Equity PLC, said:

“The Board is pleased to announce agreement for the successful realisation of its larger non-controlled assets.

Having carefully considered all options the Board now believes that given the size of the portfolio and the structural inefficiency of the listed private equity model that is accentuated by making new investments, it is now in shareholders’ best interests to announce the controlled realisation of the remaining portfolio over an appropriate period. The remaining assets have opportunity for value creation from current levels and the Board will actively work with portfolio company management to optimise realisations over time.

The Board unanimously recommends that shareholders vote in favour of the proposed change in investment objective and policy, and if these are approved, will manage the Company’s cost base and size of the Board to a scale appropriate for the Company’s future needs.”

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