Exclusive Networks files for IPO on Euronext Paris

Distributor to raise €260m in capital through primary proceeds as part of filing

Exclusive Networks plans to raise around €260m in primary proceeds after filing for an IPO on the Euronext Paris Exchange on Friday.

The French distributor filed its registration document with the French Autorité des marches financiers (AMF) on Friday, marking the first step in Exclusive Networks' plans to list on the Euronext Paris Exchange.

Exclusive Networks has been through several ownership changes since it was founded in 2003. Omnes Capital acquired a stake in the business as part of an LBO in 2010, before it was then acquired by a consortium of investors led by Cobepa in 2015 and then changed hands again in 2018 when current backer Permira invested in the business.

Exclusive Networks claims it achieved revenues of €2.9bn in 2020, up from €2bn in 2018, and reached an adjusted EBITA of €108m compared to €84m in 2018.

Speaking to CRN, CEO Jesper Trolle said the IPO will raise around €260m in primary proceeds which will enable the business to accelerate its growth strategy even faster.

"I think this move allows us to accelerate and implement our strategy a little bit quicker," he said.

"It allows us to tap into opportunities that come across our desk to a bigger degree than what we did in the past."

"We're going to continue to focus on implementing our successful strategy and take advantage of any market opportunities that come our way. So for me, frankly, it's going to be more of the same, we're going to continue to look at M&A for companies that fit our culture and share our DNA, based on either geographical presence or capabilities that we feel are needed. We're going to continue to spend a lot of our time in discussions with our vendors, with partners, understanding what services and tools we will bring to the cybersecurity ecosystem to ultimately help drive this transition to a truly trusted digital world."

The process will take "several weeks" and is subject to market conditions and approval by the AMF.

Most of Exclusive's current investors will retain shares in the business, Trolle said, but added there will be some sell down and the release of some shares from existing stakeholders as part of the IPO.

The CEO said that Euronext Paris is the stock market of choice because the company wishes to maintain its French heritage. The business was founded in 2003 by Frenchman Olivier Breittmayer - who stepped down as CEO last year.

"Fast forward 18 years, and Exclusive has turned into this global cybersecurity powerhouse. France is where things originated and that's still a very big part of the culture and the legacy of the business. Our headquarters is still in France, so for us this was a natural listing place."

An IPO would enable Exclusive to continue its growth journey uninterrupted, said Trolle, as well as raise the profile and brand of the distributor.

"Most companies outside of the IT industry know our vendors and some of our partners, but they don't know who we are. In a way we've always been the company behind the companies, you know," he said.

"We think taking a step into the public markets allows us to tap into a different audience, get more awareness of our business, who we are, what we do, and drive more visibility."

The move would put Exclusive Networks among just a handful of IT distributors operating in the market today including Midwich, Exertis, Arrow Electronics, Synnex, Esprinet and ALSO, that are publicly listed.

AV distributor Midwich IPOed in 2016, valuing the distributor at £165.3m and raising £75.2m in gross proceeds.

Publicly listed distributors have seen their share prices shoot up during the pandemic at levels comparable to the world's largest tech companies including Amazon and Google.

Italian distributor Esprinet's share price grow by 334 per cent since the start of 2019 while Swiss firm ALSO has seen a 170 per cent improvement on its share price over the same time frame.

US based Arrow Electronics has also seen a 71 per cent jump in its share value since the start of 2019.

Trolle said that, while he has observed a good market for the tech sector during the pandemic, that was not a factor in Exclusive's plans to IPO.

"That's not been the reason [for our plans to IPO]," he said.

"A project like this takes a long time to pull off, so you can't just hit a switch and go public when the market is good. This is a very long project that has taken a lot of time and the involvement of a lot of people to pull off."