Encavis, KKR, Viessmann and ABACON enter into strategic partnership

On 14 March 2024, Encavis AG announced that the company has signed an Investment Agreement with Elbe BidCo AG, a holding company controlled by investment funds, vehicles and accounts advised and managed by Kohlberg Kravis Roberts & Co. L.P. (“KKR”). The aim is to enter into a strategic partnership to ensure long-term growth for Encavis. The family company Viessmann will invest as co-investor in the KKR-led consortium.  

On 24 April 2024, KKR has made the offer document for the voluntary public takeover offer available on the offer website (www.elbe-offer.com).  

The acceptance rate of the offer at the end of the acceptance period was 68.55 per cent (as of 29 May 2024, 24:00 h CEST). The minimum acceptance threshold of 54.285 per cent for the offer has thus been met. In addition to other closing conditions, the transaction is subject to the implementation of the shareholder control proceedings by BaFin. 

Shareholders who have not declared their acceptance of the takeover offer by 29 May 2024 had the opportunity to accept the offer during the so-called ‘additional acceptance period’. The additional acceptance period expired on 18 June 2024 at 24:00 hours (CEST). At the expiry of the additional acceptance period, the final acceptance rate of the offer 87.41 per cent (status of the notification pursuant to section 23 (1) sentence 1 no. 3 WpÜG dated 21 June 2024). 

On 22 November 2024, the Bidder announced the receipt of the last outstanding regulatory approval and that the offer will be settled within the next eight banking days. Following settlement of the offer, the Bidder will hold a total of around 87.73 per cent of Encavis shares. 

On 22 November 2024, the Bidder announced the receipt of the last outstanding regulatory approval and that the offer will be settled within the next eight banking days. Following settlement of the offer, the Bidder will hold a total of around 87.73 per cent of Encavis shares. 

Following settlement of the offer, the intention is to delist Encavis from the stock exchange as soon as legally and practically possible, in order to benefit from the financial flexibility and long-term commitment of KKR and Viessmann. 

In accordance with Section 16 of the German Securities Trading and Takeover Act (WpÜG), Encavis shareholders who had not tendered their shares by the end of the acceptance period on 29 May 2024 at midnight (CEST) were able to tender them until the end of the statutory additional acceptance period which ended on 18 June 2024 at 24:00 hours (CEST). After expiry of this period, shareholders who have not accepted the offer can continue to sell their shares via the stock market. 

Following settlement of the offer, the intention is to delist Encavis from the stock exchange as soon as legally and practically possible after closing. This may impact remaining shareholders in their ability to sell their shares at this price level due to an expected considerably decreased liquidity and trading volume in Encavis shares following a delisting. 

On 22 November 2024, the Bidder announced the receipt of the last outstanding regulatory approval. With the fulfilment of all offer conditions, the public takeover offer has been successful and the offer price of EUR 17.50 per Encavis share will be instructed for payment to the Encavis shareholders who tendered their shares as part of the public takeover offer within the next eight banking days. 

Following settlement of the offer, the intention is to delist Encavis from the stock exchange as soon as legally and practically possible after closing. This may impact remaining shareholders in their ability to sell their shares at this price level due to an expected considerably decreased liquidity and trading volume in Encavis shares following a delisting. 

The offer document is a comprehensive set of documentation that must be prepared and published by a bidder. It contains all the necessary information to enable interested parties to fully understand and evaluate the offer. This includes details of the offer such as the name and address of the bidder, the securities offered, the type and amount of consideration as well as conditions and acceptance periods. 

In addition, the document contains information on planned measures to finance the offer, expected effects on the bidder´s financial position and statements on future business plans, including possible effects on employees and other involved parties.

With the joint reasoned statement, the Management Board and the Supervisory Board of Encavis evaluate the voluntary public takeover offer of the consortium led by KKR dated 24 April 2024 in accordance with Section 27 of the German Securities Acquisition and Takeover Act (WpÜG).  

The Management Board and the Supervisory Board are thus fulfilling their legal obligation to independently and carefully review the offer document in the best interests of all stakeholders of the company. 

Two parts of the joint reasoned statement can be highlighted in particular: A financial assessment of whether the offer price of EUR 17.50 per share is financially adequate; and an assessment of the economic and strategic impact of the offer on Encavis, the interests of the employees and Encavis' locations. As a result, both boards recommend all Encavis shareholders to accept the offer in the joint reasoned statement. 

The Management Board and the Supervisory Board of Encavis consider the offer price of EUR 17.50 per Encavis share to be fair and adequate within the meaning of Section 31 para. 1 WpÜG. In the opinion of the Management Board and the Supervisory Board, the offer price allows shareholders to secure immediately and upfront a significant share of the targeted long-term value creation, without having to bear the execution risks and related temporary effects. In assessing the financial adequacy of the offer price, the Management Board has been advised by Goldman Sachs and the Supervisory Board by Lazard who both have issued an opinion confirming the fairness of the offer price. 

The offer price of EUR 17.50 represents a premium of 54 per cent to the XETRA closing share price of Encavis on 5 March 2024, the last undisturbed share price prior the ad-hoc release of Encavis on 6 March 2024 that the Company is in discussions with KKR, and 33 per cent to the undisturbed three-month volume weighted average share price prior to 5 March 2024. Further, the offer price exceeds the median of the target price expectations by equity research analysts for the existing Encavis share that were published during the three months prior to (and including) 5 March 2024. 

The Management Board and Supervisory Board also welcome the economic and strategic intentions of the Bidder as set out in the offer document. Among other things, the Bidder confirms its intention to fully support Encavis' current growth strategy. 

As a result, both boards recommend that the shareholders accept the offer in the joint reasoned statement. 

The final terms of the takeover offer are set out in the offer document. 

The offer document and other information in connection with the public takeover offer are available on the following website: www.elbe-offer.com. For further questions, please contact the Encavis IR department: communications@encavis.com.