Private equity investors stand to make over €70m from LBi sale to Publicis

PRLog (Press Release) - Sep. 22, 2012 - Preliminary calculations by the marketing industry’s financial research specialist Fintellect suggest that the three private equity investors that backed the merger of the international digital marketing and technology group LBi International with Bigmouthmedia in 2010 will bank a cash gain in excess of €70 million from the sale of their shares to Publicis Groupe – a gain of 102% over the two year period – if the current offer goes through as expected.

The research, published today in "Marketing Services Financial Intelligence" (www.fintellect.com), identified the three investors as Janivo Holding, The Carlyle Group and Cyrte Investments.  Between them they currently own over one third of LBi.  The €70 million gain may be augmented by as much as another €10 million (£8 million), being the uplift between the cost of shares acquired in the acquisition vehicle in April 2010 and their value on exchange for LBi shares in August 2010.

Michiel Mol, the founder of one of a predecessor companies Lost Boys, will also have seen the value of his shareholding double to €54 million over the two year period.

Chief executive Luke Taylor, who rose to that role after LBi acquired the Scandinavian group Framfab, could enjoy a gain well in excess of €4 million (£3.2 million).

“As both LBi and Publicis are public companies it would have been possible in theory for Publicis to make an offer that comprised a mixture of shares and cash, thereby reducing the strain on the Publicis coffers”, commented the report’s editor Bob Willott.  

“However, it seems highly probable that the private equity backers would have preferred a clean exit with a pile of cash rather than accept some Publicis shares.   And if the private equity investors wanted cash, it is inconceivable that other shareholders could have been persuaded to sell other than on the same terms.”

The Publicis offer puts a price tag of €416m on LBi, a price that Willott regards as “generous” relative to LBi’s recent performance (see chart).

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