Montefiore exits 27% Demos stake in trade sale

At 41 euro cents per share, Weidong will buy Montefiore's 27.14% equity stake, 6,650,000 convertible bonds and 6,200,000 share-purchase warrants. Put together and provided a full conversion of all securities, the corporate will hold a 64.1% interest in Demos.

Meanwhile, the founding family Wemaëre will retain a 30.74% holding. Founder Jean Wemaëre will remain as Demos's CEO, while YanXia Whang was appointed as the company's vice-president.

As part of the agreement, Demos's existing €16.5m corporate debt facilities will be fully repaid.

The trade sale comes more than three years after Montefiore became a minority shareholder in Demos. According to the GP's CEO Eric Bismuth, the firm initially injected €8m in convertible bonds in September 2012 and committed a further €2m in a capital increase by Demos, at 200 cents per share.

In 2014, Montefiore's initial 20% stake jumped to 27.14% after the GP invested a fresh €7.6m in both equity and convertible bonds, Bismuth told unquote".

During Montefiore's three-year shareholding, a new management team was set up in an attempt to boost the company's performance by restructuring it internally.

The GP kicked off negotiations for the sale of its stake in 2015. The process, sparking the appetite of both corporates and private equity houses, picked up pace over the past three months and trade buyer Weidong, keen on expanding in Europe, was the winning bidder.

According to Montefiore's CEO, Demos is the third asset to leave its €120m, 2007-vintage second fund in the space of a month. The vehicle recently bid farewell to portfolio company B&B Hotels, divested alongside majority owner Carlyle to PAI Partners for around €825m.

Having concluded its investment phase, Montefiore Investment II has been followed by a successor that closed on its €240m hard-cap in October 2013 and has since deployed almost half of its capital, unquote" understands.

Company
Founded in 1972, Demos provides vocational training and outsourcing services to an estimated 350,000 people worldwide every year.

Headquartered in Paris, the business operates in 12 additional French cities and is also active in London, Frankfurt, Brussels, Madrid, Warsaw, Rabat, Dubai, Beijing and Sydney, among others; its headcount currently sits at 600 people.

Listed on Alternext, Demos reported €101.5m in sales in 2014, when it transpired that the company operated at a €9.5m loss. This compares to the €103.3m turnover and €3.8m loss that the business posted in 2011.

People
Montefiore Investment – Eric Bismuth (CEO).
Groupe Demos – Jean Wemaëre (CEO).

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