GIMV’s E33.1m gain on BarcoNet

GIMV, the Belgian investor, has agreed to sell its 28 per cent stake in broadband company BarcoNet for o47.3 million. The sale, to US-based Scientific-Atlanta, could net a capital gain in excess of o33.1 million for GIMV. BarcoNet supplies multimedia distribution solutions, targeting cable, broadcast and telecom.

Scientific-Atlanta, an American broadband operator serving broadcasters, cable, telephone and utility companies, has launched a public tender offer for all the outstanding shares in BarcoNet. The deal values the shares at o5.70 each, representing a 135 per cent premium above the last trading price of o2.42, giving BarcoNet an overall enterprise value of o173 million ($154 million). The acquisition will increase Scientific-Atlanta’s European and Asian presence.

Last month GIMV’s share price fell after BarcoNet announced disappointing half-year results. The company recorded third quarter sales of o23.4 million and a net loss of o46.8 million for the same period. Simultaneously announced was cost reduction plan, which it is hoped will produce a positive EBITDA in the fourth quarter of this year. Alex Brabers, vice-president-ICT at GIMV, said the creation of shareholder value and the change in market circumstances had prompted the sale. “There were no buyers last year as the market had not begun to consolidate and any early offer would have almost certainly involved shares in the payment, which would not put us in such a good position now.”

GIMV’s involvement with BarcoNet dates back to 1982, just two years after the Flanders investment company was set up. The company made a turnaround investment in Barco, an electronics company now working in three main areas: projectors and monitors, computer systems for the graphic arts and process management systems. BarcoNet, based in Kortrijk, Belgium, was formed from Barco Communications Systems, spun-out of its parent company and listed on Euronext last November. As a Barco shareholder GIMV received 8,296,568 shares, with a book value of o14.2 million, in BarcoNet. GIMV still holds a 33 per cent stake in Barco.

Prior to its demerger from Barco, BarcoNet announced its acquisition of The industree, a Dutch broadband data communications company, for a total consideration of five million BarcoNet shares. As a result of this transaction, shareholders in The industree (including Simac Techniek NV, Atlas Venture and Crescendo Ventures) also acquired a stake in BarcoNet.

This deal represents GIMV’s second successful exit in this sector in 2001, in February it sold its stake in the cable company Telenet to Callahan Associates. The transaction was valued at o391 million and GIMV realised an estimated capital gain of o282 million, of which o187 million will be taken into account in the companies 2001 figures.

Advisors on the deal include Deutsche Banc Alex Brown, Dresdner Kleinwort Wasserstein and Belgian firm, Petercam.