Chargeurs — M&A Activity 2019

Jul 4, 2019

EXTERNAL GROWTH: CHARGEURS CREATES A GLOBAL CHAMPION IN MUSEUM HERITAGE

PRESS RELEASE

Paris – July 4, 2019

Following the acquisition of Leach in 2018, Chargeurs Technical Substrates continues to grow with the creation of a global benchmark in museum services, Chargeurs Creative Collection:

• Creation of a global network offering with the acquisition of majority stakes in three international frontrunners with a very high value added: Design PM (UK), MET Studio (UK) and Hypsos (NL)
• Launch of a new and complete offer of museum heritage and visitor experience solutions
• Chargeurs Technical Substrates' full-year revenues to exceed €60 million thanks to the transactions

"Chargeurs is continuing to implement its successful strategy of investing in high-value-added niche markets. By creating a new world leader in museum development and exceptional experiences for visitors within Chargeurs Technical Substrates, the Group has positioned itself in a global sector with high-value-creation potential experiencing very fast structural growth. The acquisitions of these majority stakes position Chargeurs on the most iconic projects in the world and will further accelerate growth in the division, which will generate revenues in excess of €60 million over the full year. In doing so, they will enable Chargeurs Technical Substrates to reach its goal of surpassing €100 million in revenues one year earlier than planned, at end-2020," said Michaël Fribourg, Chairman and Chief Executive Officer.

"We are delighted to welcome these three frontrunners into Chargeurs Technical Substrates, which will be able to leverage their unrivaled expertise to step up growth and become the global champion in museum heritage. As announced, we increased the pace of strategic organic investments at Senfa and Leach in the last 18 months in order to prepare for consolidation and achieve critical mass. With the acquisitions of these majority stakes, we will be able to increase our footprint in key markets, and aim to generate €100 million in revenues by the end of 2020 with - in the medium term - a normative operating margin of greater than 14%," said Sampiero Lanfranchi, General Manager of Chargeurs Technical Substrates.

Chargeurs Technical Substrates creates Chargeurs Creative Collection, a network bringing together all of its museum heritage and visitor experience expertise

Chargeurs has signed exclusive head of terms for the acquisition of majority stakes in three strategic entities for Chargeurs Technical Substrates. The Group has once again accelerated its value creation by launching a new game-changing offer of complementary solutions in the value chain for museums that will be headed up by a new network of four international experts, including Leach, which was acquired in 2018.

Providing the most exhaustive array of museum heritage services on the market, Chargeurs' multi-talented, multi-disciplined teams offer specialist advice on all aspects of visitor space, museum and exhibit installations.

A pioneer in the development of high-end game-changing offers, Chargeurs has reached a new milestone in the global expansion of Chargeurs Technical Substrates, one that is built on a solid partnership that combines the structural strengths of expert entities with major global exposure.

The acquisitions of these majority stakes, which are subject to standard due diligence, will allow the three entities, in addition to Leach, to pool their know-how and offer clients a new range of end-to-end solutions, while still retaining their respective management processes and current range of bespoke services.

Acquisitions of majority stakes in three niche companies: creation of a new global leader

In 2018, Chargeurs Technical Substrates acquired Leach Visual Solutions, the gold standard in visual communication solutions for premium retail outlets, museums and institutions.

The division has since been organized into two strategic units: industry, with Senfa Technologies, and graphic services, with Leach Visual Solutions. The acquisition of majority stakes in three niche companies has now strengthened the graphic services unit, which has been renamed Chargeurs Creative Collection. Subject to the successful outcome of the due diligence procedures, the three entities will represent combined revenues of €25 million over the full year:

• Design PM, a London-based company and major player in museum heritage project management. The acquisition will enable the Group to gain greater expertise in the management of technical intensive large-scale projects by capitalizing on the experience of its founder, Christopher Cawte, who will retain a share in the company. The transactions consists in the acquisition of an immediate 80% majority stake, with the remaining 20% interest to be acquired at a second stage.
• MET Studio, a London-based company founded by Alexander McCuaig 25 years ago. An iconic designer specializing in museums, exhibits and visitor experiences, it serves customers in more than 50 countries and has a very strong international outlook thanks to its presence across four continents in London, Hong Kong, Singapore, Dubai and Mexico. MET Studio has won numerous art and design awards including a Museum and Heritage Award, a Grand Designs Award and the prestigious Queen's Award for Enterprise. The transaction consists in the initial acquisition of an immediate 71% stake in the capital of the company, to be followed by the purchase of a further 13% stake at a second stage.
• Hypsos – NL, an Amsterdam-based company founded in 1910 and headed up by Mark Van Drieberge. It is a fit out contractor that offers comprehensive design project solutions for all sectors, including corporate services (installation of the Mini – BMW brandstore in Amsterdam), cultural services (Urbanian Pavilion at the Shanghai World Expo) and retail sector services. The acquisition of an immediate 51% stake – and the remaining 49% at a second stage – gives Chargeurs Technical Substrates access to a portfolio of diversified, world-class customers.

Acceleration in the creation of value for Chargeurs Technical Substrates and strengthening of its position as the world leader in visual communications for museum heritage projects

Illustrating the Group's capacity to identify profitable targets with a strong lever for value creation, these new game-changing developments will cement Chargeurs Technical Substrates' global positioning in visual communications, and set the Group firmly on track to exceeding its strategic threshold of €1 billion in revenues by end-2021.

http://www.designpm.co.uk/ https://www.metstudiodesign.com/ https://www.hypsos.com/

Financial Calendar

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Thursday, September 12, 2019 (before trading) Thursday, November 14, 2019 (after the close of trading) First-half 2019 results Third-quarter 2019 financial information

ABOUT CHARGEURS

Chargeurs is a global manufacturing and services group with leading positions in four segments: temporary surface protection, garment interlinings, technical substrates and combed wool.

It has over 2,000 employees based in 45 countries on five continents, who serve a diversified customer base spanning more than 90 countries.

In 2018, revenue totaled €573.3 million, of which more than 90% was generated outside France.

CONTACT - www.chargeurs.com Financial Communications +33 1 47 04 13 40 comfin@chargeurs.com