2007-10-31 08:30:37 CET
2007-10-31 08:30:37 CET
REGULATED INFORMATION
CapMan - Quarterly report
CAPMAN PLC GROUP INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2007
CapMan Plc Stock Exchange Release 31 October 2007, 9.30 a.m.
CAPMAN PLC GROUP INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2007
Impact of own fund investments at a substantial level
- The Group's turnover increased to MEUR 43.6 (MEUR 29.0 in
January-September 2006)
- Operating profit totalled MEUR 31.4 (MEUR 12.0)
- Carried interest amounted to MEUR 22.4 (MEUR 7.5) mainly as a
result of carried interest received from CapMan Real Estate I fund.
- The impact of Company's own fund investments was MEUR 7.9 (MEUR
3.4), of which fair value gains of investments amounted to MEUR 7.5
(MEUR 2.7).
- Profit before taxes was MEUR 34.0 (MEUR 12.6).
- Profit after taxes amounted to MEUR 25.5 (MEUR 9.5).
- Profit attributable to the parent company shareholders totalled
19.8 (MEUR 9.3), of which earnings per share were EUR 0.25 (EUR 0.12)
- Capital under management totalled MEUR 3,019.3 on 30 September 2007
(MEUR 2,598.3 on 30 September 2006)
- The value of investments announced by CapMan funds during the
review period amounted to MEUR 539.9. Investments in portfolio
companies totalled MEUR 152.0 (MEUR 110.8), and investments in and
commitments to finance real estate assets amounted to MEUR 387.9
(MEUR 74.4).
- The Group's profit before taxes for 2007 will clearly exceed the
2006 figure.
Business
CapMan is an alternative asset manager and its core business is
private equity fund management and advisory services. The funds under
management invest mainly in unlisted Nordic companies or real estate
assets. CapMan Plc's income derives from management fees from the
funds, carried interest from funds generating carried interest,
returns on direct fund investments made from CapMan Plc's own balance
sheet, and returns on real estate consulting.
CapMan Plc's business areas
CapMan has two business areas: CapMan Private Equity (management of
private equity funds making investments in portfolio companies) and
CapMan Real Estate (management of private equity funds making real
estate investments and providing real estate consulting). The funds
investing in portfolio companies focus mainly on the Nordic countries
in three investment areas: middle market buyouts (CapMan Buyout);
technology investments (CapMan Technology); and life science
investments (CapMan Life Science). The private equity real estate
funds focus on real estate targets in Finland.
Information about each business area is reported in its own segment
in the Interim Reports. The associated company Access Capital
Partners has been included in the Group's figures under CapMan
Private Equity. As far as funds are concerned, Access Capital
Partner's figures are presented separately.
Turnover and financial performance in January-September 2007
CapMan's turnover for the review period increased to MEUR 43.6 (MEUR
29.0 for the comparison period), mainly as a result of the growth in
carried interest income.
The amount of management fees paid by the funds, MEUR 18.5 (MEUR
18.7), remained at the level as the comparison period. CapMan started
receiving management fees from CapMan Technology 2007 and CapMan RE
II funds during the review period, whereas the amount of fees
received from older funds decreased due to exits implemented after
the comparison period.
Carried interest income received by CapMan totalled MEUR 22.4 (MEUR
7.5). The sale of CapMan Real Estate I fund's portfolio accrued
carried interest totalling MEUR 21.0, of which the share belonging to
the parent company shareholders was MEUR 13.4. The remaining MEUR 1.4
was accrued from carried interest income received from other funds
generating carry.
The impact of fund investments made from CapMan's own balance sheet
totalled MEUR 7.9 (MEUR 3.4). Realised returns on the investments
were MEUR 0.4 (MEUR 0.7), and fair value gains/losses relating to
fund investments were MEUR 7.5 (MEUR 2.7). The gains in fair value
were influenced by the value creation in Moventas Oy, from which
CapMan Equity VII fund made a partial exit during the review period,
and by value creation in other portfolio companies of CapMan Equity
VII fund, in portfolio companies of CapMan Buyout VIII fund and in
the funds managed/advised by the associated company Access Capital
Partners. The main value creation driver in CapMan funds' investment
operations is increase in portfolio companies' sales, which is
supported by increase in profitability and exploitation of market
conditions. The aggregate fair value of all fund investments made
from CapMan's own balance sheet was MEUR 46.6 at 30 September 2007.
Returns on real estate consulting operations totalled MEUR 1.6 (MEUR
1.4) and other operating income within turnover was MEUR 0.7 (MEUR
0.6). Operating expenses were MEUR 19.8 (MEUR 20.3). The fall in
expenses is mostly due to one-off fundraising expenses and bonus
allocation differences in the comparative period. Comparable
operating expenses have increased by some 5% against the comparison
period.
The Group's operating profit increased to MEUR 31.4 (MEUR 12.0). The
share from the associated companies' result increased to MEUR 1.9
(MEUR 0.1), mainly with the value creation in the portfolios of the
Maneq funds, which are included in CapMan's associated companies.
Profit before taxes was MEUR 34.0 (MEUR 12.6) and profit after taxes
MEUR 25.5 (MEUR 9.5). The parent company shareholders' share of the
profit was MEUR 19.8 (MEUR 9.3), and earnings per share were EUR 0.25
(EUR 0.12).
The impact of carried interest income on the profit is a prominent
factor when analysing the first three quarters of the year. As a
result of fluctuations in accrued carried interest, CapMan's
financial performance should be examined over a longer time span than
the quarterly reviews.
Balance sheet and financial position on 30 September 2007
The amount of non-current assets in the balance sheet increased to
MEUR 75.4 during the review period (MEUR 53.0 on 30 September 2006).
Fund investments from CapMan's own balance sheet increased and their
fair value at the end of the review period was EUR 46.6 (EUR 30.2).
Long-term receivables amounted to MEUR 17.9 (MEUR 13.9). Of the
receivables, MEUR 13.4 (MEUR 10.1) was loan receivables from the
Maneq funds, which are co-investors in portfolio companies with the
funds managed by CapMan. The Maneq funds' investors are CapMan and,
subject to set principles, CapMan's personnel. Goodwill was MEUR 4.8
(MEUR 4.8) and it was mainly allocated to the acquisition of
Swedestart Management AB in 2002. The Company's net cash assets
including current investments were MEUR 36.7 (MEUR 8.5). The Company
had interest-bearing liabilities worth MEUR 16.0 (MEUR 4.7).
CapMan's equity ratio at the end of the review period was 64.8%
(81.1%). Return on equity for the period was 39.0% (18.5%) and return
on investment 43.6% (23.7%). The Company has target levels of at
least 50% for the equity ratio and over 25% for return on equity.
Key Figures
30.9.2007 30.9.2006 31.12.2006
Earnings/share, EUR 0.25 0.12 0.15
Earnings/share, diluted, EUR 0.25 0.12 0.15
Shareholders' equity/share, EUR 0.95 0.70 0.74
Share issue adjusted
number of shares 77,796,919 76,127,208 76,212,849
Number of shares at the end of the
review period 78,540,222 76,379,548 77,158,698
Number of shares outstanding 78,540,222 76,349,548 77,158,698
Return on equity, % 39.0 18.5 23.4
Return on investment, % 43.6 23.7 29.9
Equity ratio, % 64.8 81.1 71.6
Turnover and profit quarterly as well as turnover and operating
profit per segment are presented in the tables section of the Interim
Report.
Fundraising
Funds investing in portfolio companies
On 9 February 2007 CapMan established a new technology fund CapMan
Technology 2007, which has investment focus on expansion and later
stage technology companies in the Nordic countries. Commitments
totalling MEUR 140.3 had been raised to the fund as at the end of the
review period and its fundraising still continues. CapMan's own
commitment to the fund is MEUR 15 and division of any carried
interest generated by the fund will be 50% for CapMan and 50% for the
Technology team.
CapMan Life Science IV fund held a final close in May at MEUR 54. The
fund invests in medical technology companies mainly in the Nordic
countries. CapMan's own commitment to the fund is MEUR 10 and the
division of any carried interest generated by the fund will be 50%
for CapMan and 50% for the Life Science team.
Real estate funds
The CapMan RE II fund reached its maximum investment capacity of MEUR
600 on 31 March 2007. The aim is to finance an average 75% of the
fund's investments with debt, in which case the MEUR 600 investment
capacity comprises MEUR 150 of shareholders' equity with the
remainder being debt financing. The investment focus of CapMan RE II
is on property development targets in Finland. The fund's management
company CapMan RE II GP Oy has an investment commitment of MEUR 2 to
the fund. CapMan Plc's share of any carried interest from CapMan RE
II is 60% and the combined share of the Real Estate investment team
and Corintium Oy, the management company's other owner, is 40%.
Capital under management
As at 30 September 2007, CapMan managed a total of MEUR 3,019.3 in
capital (MEUR 2,598.3 on 30 September 2006). The capital under
management in funds making direct portfolio investments in companies
amounted to MEUR 1,919.3 (MEUR 1,822.3). There has been growth in
capital after the review period as a result of fundraising for CapManTechnology 2007 and CapMan Life Science IV funds, and a fall in
capital as a result of the termination of operations of Finnmezzanine
Fund I and Alliance ScanEast Fund. The capital under management in
real estate funds increased during the review period as a result of
fundraising for CapMan RE II, and amounted to MEUR 1,100 on 30
September 2007 (MEUR 776 on 30 September 2006).
Capital under management by associated company Access Capital
Partners
The capital under management by CapMan Plc's associated company
Access Capital Partners increased to a total of MEUR 2,160.5 during
the review period (MEUR 1,301.5 on 30 September 2006). Of this, MEUR
1,023.5 (MEUR 832.1) was in the funds of funds and MEUR 1,137.0 (MEUR
469.4) in private equity investment mandates. The assets were
increased especially during the third quarter when Access received a
MEUR 300 private equity investment mandate from the French
government's pension fund and established a fourth-generation buyout
fund of fund ACF IV Growth Buy-out Europe. The size of the fund was
MEUR 100.0 as at 30 September 2007 and fundraising continues.
Investments and exits by funds during the review period
Funds investing in portfolio companies
Between January and September the funds made 11 new investments and
add-on investments worth MEUR 152.0 in total. New investment targets
include Global Intelligence Alliance Group Ltd, IT2 Treasury
Solutions, KMW Energi AB, Komas Oy, Mawell Ltd, Mirasys Ltd, Movial
Corporation, Nacka Närsjukhus Proxima AB, Skandia Autologistics Oy,
Telemark Røntgen Group and Walki Group. In addition, a substantial
add-on investment in OneMed Group was announced during the review
period.
The funds exited from a total of six companies, including Avitec AB,
Copterline Oy, Distocraft Oy, LindPlast A/S, MediaNorth Group
Corporation and Synerco AB, and made a partial exit from Moventas
Corporation during the review period. In addition, the funds sold
their shares in SysOpenDigia Plc. The acquisition costs of the exits
executed during the review period (including mezzanine loan
instalments and partial exits) totalled MEUR 60.6. The funds also
announced exits from Secgo Software Oy and Hantro Products Ltd during
the review period and sold their shares of Affecto Plc after the
review period.
Real estate funds
During the review period the Real Estate funds announced 14 new
investments or investment decisions. Of these ten were in completed
properties, three in properties under construction, and one in land.
Six of the completed properties are located in Helsinki, two in
Hämeenlinna, one in Tampere and one in Vantaa, and they all are
mostly office properties. The properties under construction include
the shopping centre Entresse in Espoo, Tokmanni's logistics centre in
Mäntsälä, and the shopping centre Skanssi in Turku. The land area is
located in Kivistö Vantaa. Investments totalling MEUR 132.4 were made
during the review period and the funds have additionally committed a
total of MEUR 255.5 to finance the aforementioned real estate
acquisitions and projects in the next few years.
CapMan Real Estate I fund exited from a total of 22 properties during
the review period when the sale of the fund's real estate portfolio
to Samson Properties Ltd, The Royal Bank of Scotland (RBS) and Ajanta
Oy was finalised on 31 January 2007. The acquisition price of the
portfolio was MEUR 304.4 and the sale price MEUR 377.5.
Investments and exits at acquisition cost, MEUR
1-9/2007 1-9/2006 1-12/2006
New and follow-on investments
Funds investing in
portfolio companies 152.0 110.8 158.8
Buyout 116.0 90.2 127.8
Technology 28.1 9.1 16.8
Life Science 7.9 11.5 14.2
Real estate funds 132.4 74.4 78.7
Total 284.4 185.2 237.5
Exits*
Funds investing in
portfolio companies 60.6 102.0 173.8
Buyout 42.6 83.9 144.7
Technology 18.0 13.8 24.7
Life Science - 4.3 4.4
Real estate funds 304.4 - -
Total 365.0 102.0 173.8
* includes partial exits and mezzanine loan instalments.
The investment activities of the funds managed by CapMan are
described in more detail in Appendix 2.
Status of CapMan funds as at 30 September 2007
Funds investing in portfolio companies
Investments in portfolio companies at acquisition price totalled MEUR
662.0 at the end of the review period. The fair value of the
investments was MEUR 841.7. The fund's portfolios are valued at fair
value in compliance with EVCA's guidelines, as specified in Appendix
1.
Excluding actual and estimated expenses, CapMan funds had an
investment capacity of some MEUR 700 for new and follow-on
investments in portfolio companies. Of this, some MEUR 480 is
reserved for buyout investments (including mezzanine investments),
some MEUR 175 for technology investments, and about MEUR 45 for life
science investments.
Real estate funds
At the end of the review period the funds' investments in real estate
assets at acquisition price totalled MEUR 132.4 and the fair value of
investments was MEUR 130.6. The portfolio is wholly comprised of
assets acquired during the review period. The vacancy rate of the
portfolio's completed properties at the end of the review period was
9.6%. As at 30 September 2007 the funds had also committed a total of
MEUR 255.5 to finance real estate acquisitions and projects over the
next few years. The funds have an investment capacity of some MEUR
405 for new real estate investments.
Funds' gross portfolio* as at 30 September 2007, MEUR
Portfolio at Portfolio at Share of
acquisition fair the portfolio
cost value (fair
MEUR MEUR value) %
Funds investing in
portfolio companies 662.0 841.7 86.6
Real estate funds 132.4 130.6 13.4
Total 794.4 972.3 100.0
Funds investing in
portfolio companies
Buyout 504.5 680.7 80.9
Technology 116.2 118.0 14.0
Life Science 41.3 43.0 5.1
Total 662.0 841.7 100.0
*Gross portfolio of all portfolio companies and real estate assets
managed by CapMan funds.
As a result of the real estate portfolio sale that was realised in
January and the short holding period of the current real estate
portfolio, the proportional share of real estate targets in the gross
portfolio of all funds managed by CapMan is at a low level.
Funds generating carried interest as at 30 September 2007
A private equity fund begins to generate carried interest after the
investors have regained their investment and generate a preferred
annual return, usually 7-8%. During the review period CapMan Real
Estate I and Finnventure V funds began to generate carried interest,
and of these funds CapMan Real Estate I is still in the active
investment phase. At the close of the review period the following
funds were in carry:
CapMan's Portfolio at fair
share of value 30.9.2007
cash flows* MEUR
Finnventure Fund II,
Finnventure Fund III
and Finnmezzanine Fund II B in total: 20-35% 2.8
Finnventure Fund V: 20% 57.0
Fenno Program (Fenno Fund,
Skandia I and II) in total: 10-12% 21.6
CapMan Real Estate I: 25% 81.2**
* Net share of cash flows, taking into consideration Fenno Management
Ltd's share as far as Fenno Program is concerned and Corintium Oy's
and the investment team's shares as far as CapMan Real Estate I is
concerned.
** The fund still continues active investment operations. Of the
portfolio at fair value, MEUR 58.5 is financed with debt.
The current portfolios of funds generating carried interest amounted
to MEUR 162.6 at fair value, which is 16.7% of the total fair value
of all the portfolio funds on 30 September 2007 (MEUR 972.3).
Information about each fund's investment targets is presented on
CapMan's website at www.capman.com/Fi/InvestorRelations/Funds.
CapMan's share of carried interest received from funds generating
carry is generally 20-25% of a fund's cash flow in respect of funds
that were established before 2004, and 10-15% with respect to newer
funds. The lower carried interest percentage for newer funds results
from a share of the carried interest being distributed to the members
of the investment team who have been responsible for the funds'
investment activities during the funds' life cycle (generally 10
years), in accordance with common practice in the private equity
investment industry.
CapMan's own investments in the funds
Since 2002 CapMan Plc has been a substantial investor in the funds
managed by the Group. The Company invests from its own balance sheet
about 5-10% of the total capital in equity funds that invest in
portfolio companies. The aim of investing in own funds is to improve
the Company's return on equity and to even out fluctuations in income
with returns from these investments. The investments made have been
valued at fair value in accordance with EVCA guidelines as specified
in Appendix 1. There may be quarterly variations in fair value
gains/losses due to changes in the value of investment targets as
well as to realised exits and the expenses incurred by funds.
CapMan, like other investors, gives commitments to the funds when
they are established. As at 30 September 2007 the total sum of
current investments at fair value and remaining commitments was MEUR
103.8 (MEUR 84.9 at 30 September 2006), of which remaining
commitments totalled MEUR 57.2 (MEUR 54.7). Of these, MEUR 24.0 is
allocated to the CapMan Buyout VIII Fund, MEUR 12.4 to the CapMan
Technology 2007 fund and the remainder mainly to the CapMan Life
Science IV, CapMan Mezzanine IV, CapMan Equity VII and Access Capital
Fund II funds. The commitments will be drawn down gradually within
the next 3-5 years as new investments are made. Fund investments for
the review period totalled MEUR 14.2 (MEUR 8.7). The majority of
investments were made in CapMan Buyout VIII fund. The fair value of
cumulative fund investments made from CapMan's own balance sheet was
MEUR 46.6 as at 30 September 2007 (MEUR 30.2).
CapMan's Investments and commitments in the funds as at 30 September
2007, MEUR
Investments Remaining Total
at fair value commitments
Funds investing
in portfolio companies
Equity funds 34.9 48.3 83.2
Mezzanine funds 3.1 4.5 7.6
Funds of funds* 8.3 2.2 10.5
46.3 55.0 101.3
Real estate funds 0.3 2.2 2.5
Total 46.6 57.2 103.8
* Managed by CapMan's associated company Access Capital Partners
CapMan's own investments in the funds
1-9/2007 1-9/2006 1-12/2006
Funds investing
in portfolio companies
Equity funds 11.8 6.3 9.8
Mezzanine funds 1.5 0.7 0.7
Funds of funds* 0.3 1.6 2.6
Total 13.6 8.6 13.1
Real estate funds 0.6 0.1 0.1
Total 14.2 8.7 13.2
* Managed by CapMan's associated company Access Capital Partners
Personnel
As at 30 September CapMan had 105 (99) employees, of whom 81 (71)
were located in Finland and the remainder in the other Nordic
countries.
30.9.2007 30.9.2006 31.12.2006
CapMan Private Equity 36 38 38
CapMan Real Estate 26 24 24
Investor Services 25 16 14
Internal Services 18 21 22
Total 105 99 98
In addition, six Senior Advisors and one Advisor acted as consultants
for CapMan. Five of the Senior Advisors were located in Finland and
one in Denmark. In addition to the Senior Advisors, CapMan's Nordic
Advisor Network comprises 14 Industrial Advisors. Peter Augustsson
and Jukka Härmälä were invited to join the Advisor Network during the
review period.
Changes in Group management
CapMan Plc announced changes in the Group's management and
organisation on 20 September 2007. Kaisa Arovaara was appointed as
CFO of CapMan Plc and member of the Management Group responsible for
the new Internal Services Unit, which comprises the Group's finances
and administration as well as IT and office functions. Senior Partner
Olli Liitola continues as Deputy CEO, to whom CapMan Real Estate
reports. Jerome Bouix was nominated as a Senior Partner and he
transferred to head the new Investor Services unit, which is
responsible for the Group's fundraising, fund administration,
investor relations, communications and product development. Torben
von Lowzow was nominated as a Partner and member of the Management
Group. Senior Partner Kai Jordahl, Group HR Director Hilkka-Maija
Katajisto and Legal Counsel Martti Timgren were also appointed as
members of the Management Group. All of the changes came into effect
on 1 October 2007.
Changes in Group ownership
The owners of the Company's A series shares sold a total of 3,000,000
CapMan Plc A shares and 2,000,000 CapMan Plc B shares to the newly
established company CapMan Partners B.V. in the share transactions
that were announced on 4 May 2007 and executed on 16 May 2007. CapMan
Partners B.V. is owned by corporations under control of the Senior
Partners of CapMan with equal shares. In connection with the same
transaction, the Board of Directors of CapMan Plc approved an
application for the conversion of a total of 2,000,000 unlisted
CapMan Plc A shares entitling to voting rights into listed CapMan Plc
B shares. Due to these share transactions and conversions, CapMan
Partners B.V. became the second largest shareholder and the largest
holder of voting rights in CapMan Plc. A total of seven statutory
notices of changes were issued in May with respect to these share
transactions.
CapMan Plc had 4,521 shareholders (5,178 shareholders) at the end of
the review period. The number of shareholders has declined from the
comparison period while the proportion of foreign and
nominee-registered shareholders (excluding the 6.4% holding of CapMan
Partners B.V.) has increased from 30.2% to 35.8%.
Share capital, share trading and share price
CapMan Plc's share capital totalled EUR 771,586.98 at the end of the
review period. The Company had 72,540,222 listed B shares and
6,000,000 unlisted A shares. B shares have one vote each and A shares
10 votes each.
The trading volume of B shares increased by some 60% compared to the
comparison period and the value of traded shares doubled. The B
shares had a closing price of EUR 3.55 at the end of the review
period. The Company had a market capitalisation of MEUR 257.5 (MEUR
188.0) on 30 September 2007 and the market value including CapMan A
shares was MEUR 278.8 (MEUR 210.0).
A clear growth in the trading turnover of 2000A/B stock options was
also discernible. A total of 1,381,524 B shares were subscribed and
entered in the Trade Register during the review period. The
subscription price of the shares, EUR 828,914.4, was entered in
invested unrestricted shareholders' equity in accordance with a
decision made by the AGM. Including the options specified above, a
total of 86,796 B shares were subscribed during the review period and
they were entered in the Trade Register on 12 October 2007. The
subscription period of the B shares with the options specified above
will terminate on 31 October 2007.
During the review period no shares were subscribed with 2003A stock
options that were listed in October 2006.
Trading and price development of shares and options
B shares 2000A/B options 2003A options
1-9/2007 1-9/2006 1-9/2007 1-9/2006 1-9/2007
Trading
turnover,
number 25,738,832 16,260,386 1,979,377 1,061,392 447,688
Trading
value, MEUR 89.2 44.6 5.5 2.3 0.8
Trading
price, EUR
Highest 4.07 3.15 3.40 2.27 2.55
Lowest 2.86 2.33 2.06 1.62 1.40
Volume
weighted
average price 3.50 2.73 2.78 2.12 1.85
Closing price
at 30 Sept. 3.55 2.75 2.94 2.00 2.11
Decision adopted by the Annual General Meeting
CapMan Plc's Annual General Meeting was held on 29 March 2007 in
Helsinki. The AGM adopted the 2006 financial statements and
discharged the Board of Directors and the CEO from liability for the
2006 fiscal year. The AGM decided that a dividend of EUR 0.12 per
share will be distributed to shareholders for the 2006 financial
year. The dividend was paid on 12 April 2007.
Sari Baldauf, Tapio Hintikka, Lennart Jacobsson, Urban Jansson, Teuvo
Salminen and Ari Tolppanen were elected to the Board of Directors by
the AGM. PricewaterhouseCoopers Oy, authorised public accountants,
with Jan Holmberg, APA, as the Lead Auditor and Terja Artimo, APA, as
the deputy auditor, were elected to continue as the Company's
Auditors.
The AGM adopted the Board's proposals to amend the Company's Articles
of Association and authorised the Board of Directors to decide on
issuing a maximum of 20,000 new CapMan Plc B shares or to issue stock
options and other entitlements. In addition, the AGM authorised the
Board of Directors to decide on repurchasing a maximum 80,000 CapMan
Plc B shares by using the Company's unrestricted shareholders'
equity. The AGM decided that the share subscription prices to be
accrued from share subscriptions pertaining to the Company's stock
option plans shall be recorded in the Company's invested unrestricted
shareholders' equity. The AGM decisions and the amended Articles of
Association are presented in full on CapMan's website at
www.capman.com/Fi/InvestorRelations/AnnualGeneralMeetings and
www.capman.com/Fi/AboutCapMan/CorporateGovernance/ArticlesofAssociation/
Events after the review period
CapMan Plc's 2003B stock options were quoted on the OMX Nordic
Exchange in Helsinki on 1 October 2007. 2003B stock options total
625,000 and each option entitles the owner to subscribe for one
CapMan Plc B share. The share subscription price for subscribing to
CapMan Plc's share with a 2000B stock option is currently EUR 1.35
per share. Annually-paid dividends reduce the share subscription
price. The share subscription prices are entered in the invested
unrestricted shareholders' equity. The share subscription period for
CapMan Plc 2003B stock options began on 1 October 2007 and ends on 31
October 2009.
Outlook
CapMan Private Equity
Private equity investment in Europe is expected to show growth in the
mid-term and long-term. The foundation for growth is that
institutional investors and other substantial investor groups,
including high net worth individuals, have increasingly taken private
equity investment as a part of their investment allocations.
Private equity investment has established its position in the
financing of M&As and growth. The growth of private equity investment
in the Nordic countries continues to be accelerated by consolidation
in various sectors, family successions, privatisation of public
services and functions, the strong contribution of R&D in the
technology and life science sectors, and increasing entrepreneurial
activity.
The competition for middle market buyout companies is tense due to
the number of players and the availability of loan financing. There
has been nervousness in putting together syndicated debt packages for
big buyout investments, which has reflected on the cost of loan
financing across all sectors. As for middle market buyouts,
availability has not been a challenge. CapMan's local presence in the
Nordic countries enables active searching for investee companies
throughout the Nordic region, which is important in the prevailing
competitive situation, along with value creation through
buy-and-build strategies and growth. The competition in the
technology and life science sectors is less fierce and there are good
opportunities for syndicated investments.
CapMan will continue to implement its Nordic investment strategy. The
number of new potential investee companies remains at a good level.
CapMan's investment teams continue to have solid market coverage
ensuring access to the majority of potential investment targets. The
teams have comprehensive resources to increase portfolio companies'
value through active work on the companies' Boards of Directors.
CapMan is in a good position to continue as a proactive player in the
private equity market, as its funds making investments in portfolio
companies have approximately MEUR 700 in capital for new and
follow-on investments.
CapMan Real Estate
The liquidity of real estate markets has remained good and overall
sales volumes are expected to stay at broadly the same level as the
previous year. Rising interest rates in financial markets and banks'
increasing reluctance to grant property mortgages will be reflected
in competition and prices in real estate markets. The use of equity
will increase while transactions in which a high proportion of debt
financing is used will decrease. High prices are still being paid for
good core targets, whereas yield requirements are expected to rise in
more opportunistic targets.
Leasing activity of office properties has been strong with the
prevailing good economic growth. New construction projects have been
started, which will have an effect on the upcoming supply of
premises, especially in the office segment. The level of demand for
retail properties has remained high.
The resources of CapMan's Real Estate funds have been further
strengthened. The funds have adequate personnel resources, a
competitive structure and an aggregate investment capacity of some
MEUR 405 for seeking good investment targets and developing the
current portfolio in Finland. The resources, combined with the team's
reliability and flexibility, have provided the funds with several
investment opportunities and CapMan Real Estate has succeeded in
acquiring new investment targets worth EUR 400 within a year. We
believe that individual properties that suit our funds' investment
focuses will also be available in the future and will enable our
funds to achieve their targets.
CapMan Plc Group
CapMan's strategy is to exploit growth opportunities within the
alternative asset class. In addition to CapMan's existing product
areas (Private Equity and Real Estate) the alternative asset class
includes, among others, infrastructure investment, forestry
investment and active public market funds. CapMan is exploring
opportunities for expanding into some of these sectors and
geographically especially to Russia.
The Group's profit before taxes for 2007 will clearly exceed that of
2006. The final result for 2007 will depend on how many exits by
funds already generating carried interest will occur by the end of
2007 and on how the value of investments develops in those funds in
which CapMan is a substantial investor.
According to our understanding the exit markets will remain
favourable and CapMan Equity VII A, B and Sweden funds as well as
Finnventure Fund IV are expected to begin to generate carried
interest during 2008. The funds investing in portfolio companies have
several exit processes underway.
CapMan Plc will publish its Financial Statements Bulletin for 2007 on
31 January 2008.
Helsinki, 31 October 2007
CAPMAN PLC
Board of Directors
Press conference:
A press conference in Finnish will be held for analysts and the media
today at 12.00 noon in CapMan's premises at Korkeavuorenkatu 32,
Helsinki, Finland. Heikki Westerlund, CEO, will present CapMan Plc's
interim result and describe the current market environment. A light
lunch will be served at the event.
Presentation material for the press conference will be published in
Finnish and in English on the Group's website after the press
conference has commenced.
For further information, please contact:
Heikki Westerlund, CEO, tel. +358 9 6155 8304 or mobile +358 50 559
6580
Kaisa Arovaara, CFO, tel. +358 9 6155 8383 or mobile +358 50 370 3715
Distribution:
Helsinki Exchanges
Principal media
www.capman.com
GROUP BALANCE SHEET (IFRS)
€ ('000) 30.09.07 30.09.06 31.12.06
ASSETS
Non-current assets
Tangible assets 852 821 672
Goodwill 4,845 4,845 4,845
Other intangible assets 694 625 710
Investments in associated companies 3,374 1,126 2,860
Investments at fair value
through profit and loss
Investments in funds 46,561 30,240 33,122
Other financial assets 882 1,269 848
Receivables 17,946 13,897 13,835
Deferred income tax assets 262 204 231
75,416 53,027 57,123
Current assets
Trade and other receivables 7,146 10,551 5,521
Other financial assets at fair value
through profit and loss 16,867 1,699 2,779
Cash and bank 19,877 6,826 14,137
43,890 19,076 22,437
Total assets 119,306 72,103 79,560
EQUITY AND LIABILITIES
Capital attributable the Company's equity
holders
Share capital 772 764 772
Share premium account 38,968 38,480 38,968
Other reserves 2,118 1,183 1,218
Translation difference 259 49 316
Retained earnings 25,829 12,903 15,074
67,946 53,379 56,348
Minority interest 5,806 318 599
Total equity 73,752 53,697 56,947
Non-current liabilities
Deferred income tax liabilities 4,132 1,069 2,234
Interest-bearing loans 16,000 0 10,000
Other liabilities 490 485 430
20,622 1,554 12,664
Current liabilities
Trade and other payables 20,326 12,015 7,409
Interest-bearing loans and borrowings 0 4,650 1,944
Current income tax liabilities 4,606 187 596
24,932 16,852 9,949
Total liabilities 45,554 18,406 22,613
Total equity and liabilities 119,306 72,103 79,560
GROUP INCOME STATEMENT (IFRS)
€ ('000) 1-9/2007 1-9/2006 1-12/2006
Turnover 43,561 28,988 38,032
Other operating income 108 622 687
Personnel expenses -10,588 -10,951 -13,958
Depreciation and amortisation -444 -527 -726
Other operating expenses -8,720 -8,835 -11,958
Fair value gains / losses of investments 7,460 2,740 3,549
Operating profit 31,377 12,037 15,626
Financial income and expenses 693 457 420
Share of associated companies' result 1,889 120 1,279
Profit before taxes 33,959 12,614 17,325
Income taxes -8,472 -3,109 -4,893
Profit for the financial year 25,487 9,505 12,432
Attributable to:
Equity holders of the company 19,791 9,259 11,455
Minority interest 5,696 246 977
Earnings per share for profit
attributable to the equity
holders of the Company:
Earnings per share, € 0.25 0.12 0.15
Diluted, € 0.25 0.12 0.15
Operating profit, % 72.0 41.5 41.1
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to the equity holders of the Company
EUR ('000) Share Share Other Trans- Re- Total Mino- Total
capital premium reser- lation tained rity equity
account ves differ- earn- inte-
rences ings rest
Equity on
31.12.2005 759 38,157 948 -148 9,156 48,872 220 49,092
Share
subscriptions
with options 5 323
Translation
difference 197 6
Options 235 -197
Profit for
the
financial
year 9,259 245
Dividends
paid -5,315 -153
Equity on
30.9.2006 764 38,480 1,183 49 12,903 53,379 318 53,697
Equity on
31.12.2006 772 38,968 1,218 316 15,074 56,348 599 56,947
Share
subscriptions
with options 883
Translation
difference -57
Options 17 223
Profit for
the
financial
year 19,791 5,696
Dividends
paid -9,259 -428
Other changes -61
Equity on
30.9.2007 772 38,968 2,118 259 25,829 67,946 5,806 73,752
GROUP'S CASH FLOW STATEMENT (IFRS)
€ ('000) 1-9/2007 1-9/2006 1-12/2006
Cash flow from operations
Profit for the financial year 19,791 9,259 11,455
Adjustments to operating profit 4,514 547 352
Cash flow before change
in working capital 24,305 9,806 11,807
Change in working capital 11,030 719 889
Financing items and taxes -1,036 -2,276 -1,548
Cash flow from operations 34,299 8,249 11,148
Cash flow from investments -7,248 -7,704 -9,466
Cash flow before financing 27,051 545 1,682
Dividends paid -9,687 -5,467 -5,923
Other financial cash flow -11,624 4,902 11,532
Financial cash flow -21,311 -565 5,609
Change in cash funds 5,740 -20 7,291
Cash funds at start of the period 14,137 6,846 6,846
Cash funds at end of the period 19,877 6,826 14,137
Accounting principles
The Group's Interim Report is in compliance with IAS 34, Interim
Financial Reporting Standard. The same accounting principles as in
the annual financial statements of 31 December 2006 have been
applied. The information presented in the Interim Report is
un-audited.
Appendices in accordance with IFRS 7, Financial Instruments:
Disclosures (effective as of 1 January 2007) have been included in
the Interim Report in so far as their significance to the Group's
financial information is concerned.
Segment information
€ ('000) 1-9/2007 1-9/2006 1-12/2006
Turnover
CapMan Private Equity 18,990 25,438 33,116
CapMan Real Estate 24,571 3,550 4,916
Total 43,561 28,988 38,032
Operating profit
CapMan Private Equity 10,337 11,603 15,404
CapMan Real Estate 21,040 434 222
Total 31,377 12,037 15,626
Income taxes
The Group's taxes are calculated on the basis of the estimated
average tax rate during the fiscal year. Deferred taxes are
calculated on the basis of all temporary differences between book
value and fiscal value.
Dividends
A dividend of EUR 0.12 per share or total of MEUR 9.3 was paid for
year 2006 (EUR 0.07 per share, MEUR 5.3 in total for the year 2005).
Non-current assets
€ ('000) 30.09.2007 30.09.2006 31.12.2006
Investments in funds
at fair value through
profit and loss at Jan 1 33,122 20,288 20,288
Additions 14,147 8,723 13,233
Disposals -8,168 -1,511 -4,117
Fair value gains/losses
on investments 7,460 2,740 3,718
Investments in funds at fair value
through profit and loss
at end of the period 46,561 30,240 33,122
Transactions with related parties (associated companies)
€ ('000) 30.09.2007 30.09.2006 31.12.2006
Receivables - non-current 14,281 7,881 7,940
Receivables - current 125 125 125
Non-current liabilities
€ ('000) 30.09.2007 30.09.2006 31.12.2006
Interest bearing loans 16,000 0 10,000
The interest-bearing liability is related to a financial credit limit
agreement, the sum of the facility is MEUR 16.
Seasonal nature of business
Carried interest income is accrued on an irregular schedule depending
on the time of execution of realisations. One exit may have
substantial impact on CapMan Plc's result for the financial year.
Personnel
30.09.07 30.09.06 31.12.06
Finland 81 71 72
Denmark 4 7 5
Sweden 15 16 16
Norway 5 5 5
In total 105 99 98
Contingent liabilities
€ ('000) 30.9.07 30.9.06 31.12.06
Leasing contracts and other
contingent liabilities 9,810 13,749 13,451
Commitments to funds 57,237 54,703 50,529
Turnover and profit quarterly
Year 2007
MEUR 1-3/07 4-6/07 7-9/07
Turnover 28.1 7.5 8.0
Management fees 5.8 6.5 6.2
Carried interest 21.2 0.2 1.0
Income of investments in
funds 0.3 0.0 0.1
Real Estate consulting 0.6 0.5 0.5
Other income 0.2 0.3 0.2
Fair value gains / losses of
investments 4.1 0.5 2.9
Operating profit 25.4 1.1 4.9
Financial income and expenses 0.3 0.2 0.2
Share of associated companies'
result 0.9 0.2 0.8
Profit before taxes 26.7 1.4 5.9
Profit for the period 19.9 1.0 4.6
Year 2006
MEUR 1-3/06 4-6/06 7-9/06 10-12/06 1-12/06
Turnover 8.9 9.5 10.6 9.0 38.0
Management fees 5.6 6.8 6.3 6.2 24.9
Carried interest 2.6 1.2 3.7 1.9 9.4
Income of investments in
funds 0.0 0.7 0.0 0.2 0.9
Real Estate consulting 0.5 0.6 0.4 0.5 2.0
Other income 0.2 0.2 0.2 0.2 0.8
Fair value gains / losses of
investments 2.2 -0.5 1.0 0.8 3.5
Operating profit 5.2 2.4 4.4 3.6 15.6
Financial income and expenses 0.1 0.2 0.2 -0.1 0.4
Share of associated companies'
result -0.2 0.2 0.1 1.2 1.3
Profit after financial items 5.1 2.8 4.7 4.7 17.3
Profit for the period 3.7 2.2 3.6 2.9 12.4
APPENDIX 1: CAPMAN PLC GROUP FUNDS AT 30 SEPTEMBER 2007, MEUR
Fund's
Size Paid-in current Distributed Net
* capital portfolio cash flow cash
at at
** cost fair to in- to man- assets
value vestors agement *****
*** company
(carried
interest)
****
Funds generating
carried interest
FV II, FV III 1)
and FM II B
in total 58.6 57.4 3.1 2.8 179.6 44.1 0.5
FV V 169.9 159.8 58.6 57.0 217.4 1.1 4.1
Fenno Program 2)
(Fenno Fund,
Skandia I and
Skandia II)
in total 59.0 59.0 13.8 21.6 114.7 7.5 0.4
CMRE I 5) 500.0 351.1 82.6 81.2 183.0 28.5 -54.4
In total 787.5 627.3 158.1 162.6 694.7 81.2 -49.4
Funds that are
expected
to start
generating
carried interest
during 2008
FV IV 59.5 59.5 11.8 15.8 64.0 0.6
CME VII A 156.7 126.3 85.5 154.9 74.0 3.8
CME VII B 56.5 49.9 33.9 72.5 33.3 1.9
CME SWE 67.0 53.6 36.6 66.4 31.8 1.0
In total 339.7 289.3 167.8 309.6 203.1 7.3
Other funds
not yet
in carry
CME VII C 23.1 15.2 10.2 10.2 5.9 0.1
CMB VIII A 360.0 130.4 114.3 125.2 2.2
CMB VIII B 80.0 29.0 25.4 27.8 1.4
CM LS IV 54.1 16.0 13.1 13.1 0.4
CMT 2007 1) 140.3 23.4 19.7 19.7 1.5
FM III 1) 135.5 131.3 63.4 74.5 106.6 4.2
CMM IV 4) 240.0 108.0 88.9 99.0 13.7 7.1
CMRE II 6) 600.0 60.2 49.8 49.4 -28.7
In total 1,633.0 513.5 384.8 418.9 126.2 -11.8
Funds with
limited
carried interest
potential to
CapMan
NPEP II 3),
FV V ET,
SWE LS 3),
SWE Tech 1), 3)
and FM II A,
C, D 1)
In total 259.1 233.6 83.7 81.2 119.2 6.4
Equity funds
in total 3,019.3 1,663.7 794.4 972.3 1,143.2 81.2 -47.5
CAPITAL MANAGED/ADVISED BY ASSOCIATED COMPANY ACCESS CAPITAL PARTNERS
AS AT 30 SEPTEMBER 2007, MEUR
Fund Size*
ACF 1) 250.3
ACF II A 1) 153.4
ACF II B 1) 123.5
ACF III A 1) 307.4
ACF III B 1) 88.9
ACF IV 1) 100.0
Private Equity Mandates 1,137.0
Total capital 2,160.5
Fund abbreviations:
ACF = Access Capital Fund
ACF II A = Access Capital Fund II Mid-market Buyout
ACF II B = Access Capital Fund II Technology
ACF III A = Access Capital Fund III Mid-market Buyout
ACF III B = Access Capital Fund III Technology
ACF IV = Access Capital Fund IV Growth Buyout
CMB = CapMan Buyout Fund
CME = CapMan Equity
CMLS = CapMan Life Science Fund
CMM = CapMan Mezzanine
CMRE = CapMan Real Estate
CMT 2007 = CapMan Technology 2007
FM = Finnmezzanine Fund
FV = Finnventure Fund
SWE LS = Swedestart Life Science
SWE Tech = Swedestart Tech
* Total capital committed by investors. In CapMan's statistics the
terms 'capital under management' and 'fund size' refer to the gross
capital commitment in the fund. Funds managed by associated company
Baltcap Management Oy are excluded (CapMan's share of Baltcap
Management Oy is 20%; the total size of the funds is approx. MEUR
31.2). Capital under management by Access Capital Partners is
presented separately.
** Total capital paid into the fund by investors.
*** The funds' investments in portfolio companies are valued to fair
value in accordance with the guidelines of the European Private
Equity & Venture Capital Association (EVCA) and investments in real
estate assets are valued in accordance with the value appraisements
of external experts. The fair value is the amount for which an asset
could be exchanged between knowledgeable, willing parties in an arm's
length transaction. Due to the nature of private equity investment
activities, the funds' portfolios contain investment targets with
fair value greater than acquisition cost as well as investment
targets with fair value less than acquisition cost. Portfolio
companies are valued at acquisition cost from the time of investment
for a 12-month period, after which they are valued at fair value.
According to the EVCA's conservative policies, technology and life
science targets are typically valued at acquisition cost or less up
to exit.
**** CapMan Plc Group's share of carried interest income.
When the return of a fund has exceeded a required cumulative return
target, the management company is entitled to a share of the cash
flow from the funds (carried interest).
Cash flow includes both the distribution of profits and distribution
of capital. Carried interest % of the remaining cash flows are (for
the funds which were generating carried interest as at 30 September
2007): Finnventure Fund II: 35%, Finnventure Fund III: 25%, Fenno
Program/Fenno Fund: 20%, Fenno Program/Skandia I: 20%, Fenno
Program/Skandia II: 20%, Finnmezzanine Fund II B 20%, CapMan Real
Estate I: 40%.
CapMan Plc Group's share of the carried interest is less than 100%
for the following funds: CapMan Buyout VIII A and B: 70%, CapMan
Mezzanine IV: 75%, CapMan Real Estate I: 64%, CapMan Real Estate II:
60%, Fenno Fund and Fenno Program (Skandia I, II): 50-60%, CapMan
Technology 2007: 50%, CapMan Life Science IV: 50%, Swedestart Tech:
12%, Swedestart Life Science: 10%, Access Capital Fund: 47.5%, Access
Capital Fund II: 45%, Access Capital Fund III: 25%, Access Capital
Fund IV: 25%, Access/Private Equity Mandates: 25%.
***** When calculating the investors' share, the fund's net cash
assets have to be taken into account in addition to the portfolio at
fair value. Net cash assets are typically negative in the real estate
funds, due to the use of senior debt.
1) The fund is comprised of two or more legal entities (parallel
funds are presented separately only if their investment focuses or
portfolios differ significantly).
2) The Fenno, Skandia I and Skandia II funds together comprise the
Fenno Program, which is managed jointly with Fenno Management Oy.
3) Currency items are valued at the average exchange rates quoted at
30 September 2007.
4) CapMan Mezzanine IV: The paid-in commitment includes a MEUR 96
bond issued by Leverator Plc. The fund's liquid assets include a loan
facility, with which investments are financed up to the next bond
issue. Distributed cash flow includes payments to both bond
subscribers and equity investors.
5) CapMan Real Estate I: The paid-in commitment includes a MEUR 100
bond issued by Real Estate Leverator Plc and a MEUR 201.3 senior
loan. Distributed cash flow includes repayment of the bonds and cash
flow to the fund's equity investors. The combined investors' and
management company's share of the fund's assets is calculated by
deducting net cash assets from the fair value.
6) CapMan Real Estate II: 25% of the fund's size or MEUR 150 is
shareholders' equity and the 75% remainder is debt. The investors'
share of the fund's assets is calculated by deducting net cash assets
from the fair value.
APPENDIX 2: INVESTMENTS AND EXITS BY CAPMAN FUNDS 1 JANUARY - 30
SEPTEMBER 2007
The investment activities of private equity funds managed by CapMan
comprise investments in portfolio companies mainly in the Nordic
countries as well as real estate investments in Finland. The
investment activities of funds investing in portfolio companies and
of funds investing in real estate assets are presented separately in
this Appendix.
In addition CapMan has a 35% stake in the funds of funds and private
equity investment mandate manager and adviser Access Capital
Partners, which is based in Paris, Munich and Guernsey. Access
Capital Partners manages/advises four funds that invest in European
mid-market buyout and venture capital funds. Further information on
Access Capital Partners can be found at
www.access-capital-partners.com.
INVESTMENT ACTIVITIES BY THE FUNDS INVESTING IN PORTFOLIO COMPANIES
The investment activities of funds making direct investments in
portfolio companies include buyouts, technology investments and
investments in the life science sector. Buyouts are made in the
middle market class in manufacturing, service and retail industries.
Technology investments focus on expansion and later stage technology
companies. Life science investments focus on companies specialising
in medical technology.
Investments in portfolio companies in the review period
Between January and September, the CapMan funds made 11 new
investments as well as add-on investments worth MEUR 152.0 in all. In
the comparative period of 2006 the funds made six new investments as
well as add-on investments totalling MEUR 110.8.
Q3 Investments in portfolio companies
CapMan Technology 2007 fund, SEB Venture Capital and the energy and
environment fund specialist Aloe Private Equity announced the
acquisition of a majority holding in KMW Energi AB in June, and the
transaction was closed in July. KMW Energi is a leading supplier of
bio fuel combustion plants in Sweden. The company's turnover was MEUR
21.6 in 2006 and it employs 40 persons.
The deal in which CapMan Buyout VIII and CapMan Life Science IV funds
acquired Swedish Nacka Närsjukhus Proxima AB together with management
was closed at the start of August. Nacka Närsjukhus Proxima is a
private healthcare provider offering specialised healthcare and
emergency unit services for the greater Stockholm area. The company's
net sales totalled approx. MEUR 19.3 in 2006.
The investment by CapMan Buyout VIII and CapMan Life Science IV funds
in Norwegian Telemark Røntgen Group, which includes Telemark
Røntgensenter AS, Haugesund Røntgeninstitutt AS, Nordland Medisinske
Senter Røntgeninstitutt AS and Tromsø MR-Senter AS, was also closed
in August. The companies are providers of high quality medical
imaging services such as X-ray, MR (magnetic resonance), CT (computer
tomography), mammography and ultrasound diagnostics in Norway. In
2006 the Group employed 50 persons and had net sales of approx. MEUR
15.
In September CapMan Technology 2007 fund invested in Finnish Mawell
Oy. Mawell provides solutions that enhance patient safety, quality
and productivity to private and public healthcare organisations and
the pharmaceutical industry mainly in the Nordic countries. The
investment will finance the company's international growth. Mawell
has some 120 employees and targets a turnover of approx. MEUR 10
million in 2007.
Investments in portfolio companies in January-June
In the first half of the year the funds made new investments in
Finnish buyout targets Komas Oy, Skandia Autologistics Oy (formerly
John Nurminen's Vehicle Logistics Unit) and Walki Group (formerly
Walki Wisa). In addition the funds invested in four technology
companies, which are Finnish Mirasys Ltd, Global Intelligence
Alliance Group Oy (formerly Novintel Oy) and Movial Oy as well as
Danish IT2 Treasury Solutions.
Exits from portfolio companies in the review period
The funds made six final exits and several partial exits in the
review period. Exits at acquisition cost (including mezzanine loan
instalments and partial exits) totalled MEUR 60.6. There were six
final exits and several partial exits in the comparative period of
2006, for which exits at acquisition cost (including mezzanine loan
instalments) totalled MEUR 102.0.
Q3 Exits from portfolio companies
CapMan Equity VII, Finnventure V ET and Swedestart Tech funds exited
Swedish repeater manufacturer Avitec AB in a trade sale to UK based
private equity investor ECI in July. Avitec posted net sales of MEUR
22.1 in 2006, and the company has 64 employees. The CapMan funds made
the initial investment in Avitec in 2002 and they held a 43.1% stake
in the company prior to the exit. The investment in Avitec has been
moderate for the investors in the CapMan funds. The exit does not
have a substantial impact on CapMan Plc's 2007 result.
Finnventure Fund V sold its 14.7% holding in Copterline Oy to a
Finnish investor consortium in September. Copterline provides search
and rescue services, helicopter emergency medical services and
charter flights, among others. Finnventure Fund V invested in the
company in 2000. The exit does not have a substantial impact on
CapMan Plc's 2007 result.
Exits from portfolio companies in January-June
In the first half of the year the funds exited from two buyout
targets, which were Swedish Synerco AB and Danish LindPlast A/S, and
from two Finnish technology targets, which were Distocraft Oy and
Medianorth Oy. The funds sold their listed shares in Finnish
SysOpenDigia Plc and made a partial exit from Finnish buyout target
Moventas Oy.
Other events in the review period
At the end of April Finnventure IV, Finnventure V and Finnventure V
ET funds announced the sale of their holding in the Finnish
information security and mobility management software provider Secgo
Software Oy to the Norwegian listed company Birdstep ASA. The funds
received shares in Birdstep Technology ASA listed on the Oslo Stock
Exchange in the transaction, which was closed in May. Because the
transaction was executed as an exchange of shares, the exit does not
have a direct impact on CapMan Plc's result for 2007. The funds will
exit from the company in total when they sell the shares received in
Birdstep. The funds invested in Secgo in 2004, and their holding in
the company was 18% prior to the sale.
Finnventure V and Finnventure V ET funds sold their stake in Hantro
Products Oy, a provider of mobile multimedia solutions, to the
American listed company On2 Technologies, Inc in May. The transaction
is expected to be closed in early November as an exchange of shares,
and therefore the funds' exit from Hantro does not have a direct
impact on CapMan Plc's result for 2007. The funds will exit from the
company in total when they sell the shares received in On2. The funds
initially invested in Hantro in 2002 and they held approx. 30%
ownership in the company prior to the sale.
Swedestart Life Science fund's portfolio company Aerocrine AB went
public on the Stockholm Stock Exchange in mid-June. Aerocrine is a
medtech company that has developed NIOX and NIOX MINO monitoring
devices for the diagnosis and control of airway inflammation such as
asthma. The fund did not sell its Aerocrine shares in connection with
the IPO and the shares are subject to a 12-month lock-up period. The
fund invested in Aerocrine in 2005, and the company's business has
developed well during the investment period.
CapMan Buyout VIII, CapMan Mezzanine IV and Finnmezzanine III funds
announced a substantial add-on investment in portfolio company OneMed
Group, which sells, markets and imports healthcare products,
healthcare equipment and laboratory products, in September. The
company will acquire the majority shareholding or 75 per cent of
Poland's leading wholesaler of healthcare products Hand-Prod Group.
It is expected that the deal, which will substantially strengthen
OneMed Group's position in Northern Europe, will be finalised in
November 2007. Including Hand-Prod Group, OneMed's turnover is
estimated at approx. MEUR 320 in 2007.
Events after the review period
In early October the Fenno Fund co-managed by CapMan and Fenno
Management Oy sold its 1,913,044 shares in Affecto Plc. Fenno Fund
invested in Affecto Oy in 1999, the company merged with Genimap Oy in
autumn 2004 and went public on the Helsinki Stock Exchange in 2005.
Fenno Fund sold the majority of its shares in connection with the
IPO. The final exit executed in October 2007 has an impact of approx.
MEUR 0.8 on CapMan Plc's result for 2007 as a result of carried
interest received from Fenno Fund. The investment in Affecto has been
excellent for investors in the funds managed by CapMan.
Finnmezzanine Fund III sold the entire share capital of Indufor Oy to
the company's operative management in early October. Indufor Oy had
transferred to the fund's ownership in March 2007 from Savcor Group,
a portfolio company of Finnmezzanine Fund III.
INVESTMENT ACTIVITIES BY THE REAL ESTATE FUNDS
Investment decisions in the review period
The Real Estate funds announced 14 new investments in the period from
January to September 2007. Of these, ten were in finished properties,
three in properties under construction and one in land. Investments
totalling MEUR 132.4 were made in the period under review, and as at
30 September 2007 the funds had additionally committed a total of
MEUR 255.5 to finance real estate acquisitions and projects in the
next few years. In the comparative period of 2006 the funds invested
MEUR 74.4 in four new targets.
Q3 Investment decisions
In early July CapMan RE II fund signed an agreement to acquire
ownership of Skanssin Kauppakeskus Oy, a shopping centre, from the
Hartela Group. Skanssi is situated four kilometres east of Turku city
centre. It is estimated that the retail centre, which will have a
leasable area of ca. 37,000 m² on two floors, will attract some 4.5
million visitors annually once it is completed in April 2009. Hartela
will continue to construct the property and to participate in its
development. The capital commitment that has been made in the
shopping centre project will be drawn down in stages during
2007-2009.
CapMan Real Estate I fund acquired two properties from Yrjö Jahnsson
Foundation in August. Ludviginkatu 3-5, located in central Helsinki,
was constructed in 1891 and is a five-storey commercial property with
a lettable area of ca. 4,000 m². The property at Elimäenkatu 9A and
9B, located in the Vallila district of Helsinki, comprises two
buildings constructed in 1926 and 1974 with an aggregate lettable
area of ca. 12,900 m².
Additionally, CapMan Real Estate I fund acquired the warehouse and
office property located at Hankasuontie 3 in Helsinki in September.
The property, which was built in 1974, has a lettable area of ca.
7,055 m² and is fully leased at the time of investment.
Investment decisions in January-June
In the first half of 2007 CapMan Real Estate I fund invested in the
following finished properties:
Kiinteistö Oy Helsingin Kalevankatu 20, Helsinki
Kiinteistö Oy Malminkaari 9, Helsinki
Kiinteistö Oy Lönnrotinkatu 20, Helsinki
Kiinteistö Oy Mastolan keskusvarasto, Vantaa
In addition the fund gave an undertaking to acquire Entresse, a
shopping centre under construction, from YIT Construction Ltd.
Entresse is located in Espoo centre and is scheduled to be completed
for the 2008 winter season. The capital commitment to buy the
shopping centre will be drawn down during 2008.
CapMan RE II fund acquired the following finished properties in the
first half of 2007:
Kiinteistö Oy Kasarmikatu 4, Hämeenlinna
Kiinteistö Oy Parolantie 104, Hämeenlinna
Kiinteistö Oy Viinikankatu 49, Tampere
In addition the fund signed an agreement with Tokmanni Oy on the
acquisition of a logistics centre to be built in Mäntsälä. The
logistics centre project will be completed in autumn 2008, and the
committed capital will be drawn down during 2008. CapMan RE II fund
also made an investment in land located in the Kivistö area of
Vantaa. In the period under review the City of Vantaa, however,
announced that it will exercise its pre-emption right to purchase the
land area. The sale of the land to the City of Vantaa was completed
after the review period in October.
Sale of CapMan Real Estate I fund's portfolio in January
The sale of CapMan Real Estate I fund's real estate portfolio
comprising 22 commercial properties to Samson Properties Ltd, The
Royal Bank of Scotland (RBS) and Ajanta Oy was closed at the end of
January. The acquisition cost of the portfolio was MEUR 304.4 and its
sale price was MEUR 377.5. CapMan Real Estate I continues its active
investment operations after the transaction.
Other events in the review period
In September CapMan RE II fund entered into a cooperation agreement
with Finesco Invest Oy for the development of a shopping centre in
the Hyvinkää town centre. The zoning of the target is currently
underway.
Events after the review period
CapMan RE II fund acquired the office property located at
Ylistönmäentie 33 in Jyväskylä in early October. The property, which
was built in 1991, has a lettable area of ca. 5,790 m² and is fully
leased to TietoEnator Corporation at the time of investment.
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