Investment company Value8 sold its participation in Kersten to the stock exchange fund Morefield, also a majority shareholding of Value8. CEO De Vries explains why.
1. Last Friday it was announced that the publicly traded Morefield – an 80% stake of Value8 – is taking over aids supplier Kersten from the same Value8. What is the thinking behind that step?
“Morefield has had the ambition to buy a growing company for years. The outside shareholders of Morefield have suggested the idea of taking over Kersten in and outside the shareholders’ meeting. This possibility has been investigated and now the AGM can vote on the proposal.
2. Why is that in the interest of Morefield shareholders?
“Morefield is a small brokerage firm. By mid-2022, Morefield will have equity of €4.6 million and a half-year profit of €0.3 million. With Kersten, shareholders get a share in a growing healthcare company, a company that has recently has grown rapidly over the years and has the ambition to continue that trajectory, which means more prospects for value growth.”
3. Does this make Morefield more attractive to investors?
“Investors have to determine that for themselves. But it is a fact that there are few listed funds in the healthcare sector in the Netherlands that are also healthy profitable. This means that an opportunity has arisen. Kersten is growing, benefits from an aging population and is excellently managed.”
4. The price Morefield pays is well above book value. Isn’t Morefield paying too much?
“At the end of June 2022, the interest in Kersten was in the books for €15 million. But it is clear that we do not want to sell the company for that. If you compare the intended purchase price against the turnover of €72 million, the EBITDA margin of 10 % and the growth potential, will find that Morefield is not paying an overextended multiple. And in the end, the shareholders get to vote for Morefield themselves.”
5. What are the consequences for the company Kersten itself?
“Kersten has an ambitious management. As a growing player, they are active in four segments of the aids market. This also means that acquisitions are made in order to grow. In 2021 there were two – Full Mobility and BSO – and recently WmoSolutions is located in Zoetermeer. It is a huge advantage to be able to use our own listed shares for financing in the event of a takeover or merger. The stock exchange listing is thus a growth enhancer for Kersten.”
6. A transaction between two companies in which Value8 is the majority shareholder. How does that work?
“Rule 1 for such a transaction is: be transparent about it. A circular has been published in which very extensive information is provided. We advise shareholders Morefield to read that circular carefully. The importance of Value8 is also paid attention to. Bottom line is that the transaction is good for Morefield and for Kersten. It is a privilege to be able to participate in this.”
7. The transaction falls in an unfavorable stock market climate. Couldn’t Morefield have waited better?
“That was not the case. It was announced in June 2022 that Morefield would be investigating a stake in Kersten. That investigation led to the conclusion that the transaction would result in a win-win situation. A balanced structure has been created and now the Morefields may -shareholders express their views on it. After that, the takeover takes place. From that moment on, Kersten has an extra trump card to boost growth.”
8. What kind of investors are interested in this share?
“Morefield will remain a small cap – even after the acquisition of Kersten. So it will mainly be small-cap investors who will look at this share. Kersten is also a forerunner in the field of sustainable entrepreneurship. 10 percent of employees are at a distance from the labor market. leading the way with a very high percentage of reuse of tools and parts. Circular working is in the DNA. For investors with an ESG focus, that is an extra asset.”
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