In connection with the restructuring of Private Equity Holding and its subsidiaries (PEH) in 2003, the buyer of a large part of PEH's buyout portfolio, CSFB Strategic Partners II L.P. (the "CSFB Fund"), agreed to pay an incremental purchase price ("earn-out") to PEH if and when certain earn-out hurdles on the sold portfolio will be reached.
The preliminary first earn-out hurdle stands at EUR 254.5 million. The CSFB Fund notified PEH that it had received EUR 231.3 million in distributions as of June 30, 2006. Hence, the gap to the first hurdle decreased to EUR 23.2 million (EUR 102.7 million as of June 30, 2005). Any distributions that the CSFB Fund will receive over and above the first hurdle in respect of the private equity investments purchased from PEH in 2003, will be shared with PEH. The CSFB Fund is contractually obliged to give notice as soon as the first hurdle is reached and PEH will inform its shareholders and the market accordingly.
The value, if any, of the stream of the future earn-out payments is not accounted for on PEH's balance sheet and therefore not included in the published NAV per share. PEH does not have sufficient information about the remaining investments in the buyout portfolio sold to the CSFB Fund in 2003 in order to attribute a value to the earn-out.
On July 13, 2006, PEH informed the market that CSFB Strategic Partners Holdings III L.P. increased its position in PEH to 1,346,895 shares (33.2% of the shares outstanding). This makes CSFB Strategic Partners Holdings III L.P. the largest shareholder of the company.
Given the uncertainty of the future value of the earn-out, the Board of Directors of PEH advises the shareholders of the company to exercise caution when trading the shares.
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For additional information:
- Dr. Dieter Dubs, Chairman, phone +41 58 261 50 00
- Annual Report 2005/2006, p. 31 (note 6)
- Dr. Dieter Dubs, Chairman, phone +41 58 261 50 00
- Annual Report 2005/2006, p. 31 (note 6)
The news release can be downloaded as a PDF-File by using the following link
