Trading Update and AGM Statem
22 July 2008
Oakley Capital Investments Limited ('the Company')
AGM Statement and Trading Update
Oakley Capital Investments Limited (AIM : OCL), the AIM-listed company established to provide investors with access to the investment strategy being pursued by Oakley Capital Private Equity L.P. (the 'Oakley Fund') delivered the following update at its Annual General Meeting.
The Oakley Fund
The primary objective of the Oakley Fund is to invest in a diverse portfolio of private mid-market UK and European businesses, aiming to provide investors with significant long-term capital appreciation.
Oakley Capital Limited ('Oakley Capital') is Investment Adviser to the Company and the Oakley Fund, and since its launch in August 2007, has considered over 60 investment opportunities, of which 20 were analysed. The majority of these opportunities were sourced directly by Oakley Capital Limited. Five opportunities progressed to due diligence of which the Oakley Fund has announced its investment in two and is actively pursuing a third opportunity.
The Oakley Fund called down €4.2 million from the Company during 2007 and on 14 March 2008 called down a further €44.1 million, to provide funds for the acquisition of Host Europe Corporation Limited ('Host Europe Group'), and investments planned in Monument Securities and Media sector targets.
Host Europe Group
On 2 April 2008 a wholly-owned subsidiary of the Oakley Fund acquired the Host Europe Group, one of Europe's leading managed web-hosting companies, for a total enterprise value of £120 million.
The Host Europe Group is made up of three divisions operating in three distinct markets within the web hosting industry. In the UK, Host Europe Group operates two divisions: Webfusion, which is the market leader for domain name registration and is the second largest shared hosting provider; and Vialtus Solutions, a provider of complex managed hosting services to the corporate and SME market. The Group also operates a division, Host Europe GmbH, which is the German market leader in the standardised managed hosting market.
The web hosting market is characterised by strong growth driven by the proliferation of broadband usage and the increasing sophistication of multimedia content. As internet users become more demanding, website owners require ever larger storage platforms capable of hosting and processing more complex and secure content. As hosting, security, and traffic balancing are not core business competences, these functions are increasingly being outsourced to specialist providers such as Host Europe Group.
Monument Securities
On 1 July the Oakley Fund acquired, together with the founders, Monument Securities Limited, the international derivatives, equities and fixed income broker, from Insinger de Beaufort Group.
Successfully trading since 1991, Monument Securities has built a considerable presence in the derivatives and equity markets and has gained a reputation as an experienced and professional broker providing quality added value services to UK and US institutional investors, hedge funds and corporate investors. Monument Securities is expected to operate on a stand-alone basis, while leveraging Oakley Capital's platform and cross-selling opportunities from Oakley Capital's extensive network of contacts.
Board changes
The Company separately announces that Katherine Innes-Ker has resigned as Non Executive Director with immediate effect. The Board would like to thank Katherine Innes-Ker for her considerable contribution to the launch of the Company and its continuing success.
The Company is also pleased to announce the appointment of Mr. Laurence Blackall as a Non-Executive Director on 22 July 2008.
Outlook
Overall conditions in the financial markets remain poor, particularly from a liquidity standpoint and this has markedly reduced the availability of credit for leveraged acquisitions. Together with the worsening economic outlook, this has impacted M&A transaction volumes and is beginning to compress valuations.
As conditions worsen, the Oakley Fund expects to see a greater proportion of investment opportunities emerging at attractive valuations. Within this deteriorating environment the Oakley Fund is well positioned, as well as differentiated from its competition, as one of the few financial buyers with a strong restructuring and operating track record. A number of strong and diverse banking relationships have been built up, which remain supportive of the Oakley Fund's investment strategies. Although cautious from a macroeconomic perspective, the Oakley Fund expects the next 24 to 36 months to yield some interesting opportunities as a result of weaker economic conditions.
Peter Dubens, Director said
'The Oakley Fund is seeing a good flow of attractive opportunities given the difficult economic environment and tightening of credit markets. These conditions provide us with a favourable backdrop, enabling us to capitalise on our restructuring and operating track record. '
For further information please contact:
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Oakley Capital Investments Limited |
+44 20 7766 6900 |
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Peter Dubens (Director) |
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Financial Dynamics |
+44 20 7831 3113 |
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Juliet Clarke / Edward Bridges / Erwan Gouraud |
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Liberum Capital Limited (Financial Adviser & Broker) |
+44 20 3100 2000 |
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Steven Tredget / Steve Pearce |
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Grant Thornton Capital Markets (Nominated Adviser) |
+44 20 7383 5100 |
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Philip Secrett / Fraser Campbell |
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Notes:
The Company has been set up to invest primarily in Oakley Capital Private Equity L.P., (the 'Oakley Fund') a private equity fund established by a team of experienced investment professionals led by Peter Dubens, executive chairman of FREEDOM4 Communications plc and former chairman of 365 Media Group plc.
The Oakley Fund will invest primarily in mid-market buy-outs in the UK and Europe. It will seek to acquire controlling positions in companies with scope for performance improvement, and in industries with strong underlying growth drivers and the potential for consolidation. The Oakley Fund will utilise the investment advisory team's proven ability to self-source transactions and actively manage portfolio companies to improve operational performance. The Oakley Fund will target equity transactions in the range of €30 million to €140 million and will seek to deliver gross IRR on its investments in excess of 25 per cent. per annum and a blended gross multiple of three times.
This information is provided by RNS
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