External cybersecurity growth plan: CS enters exclusive negotiations with Novidy’s Group
10 M€ capital increase plan

CS has entered into exclusive negotiations to acquire Novidy’s, a company that specializes in cybersecurity.

This project would be the first step in the Ambition 2021 plan presented by CS when its annual results for 2017 were published on 3 April.

Created in 2009 by a team of entrepreneurs led by Jean-Robert Pozo (CEO) and Christian Gaudin (General Director), Novidy’s has quickly established itself as a major player in the field of cybersecurity, offering consultancy, integrated security solutions and managed services. In 2017 Novidy’s posted revenues of 32 M€, with average annual growth of over 20% in the last four years and an EBIT of 9.7%. Novidy’s has 130 staff on its payroll.

As a designer, integrator and operator of mission-critical systems in the Defense and Security, Space, Aeronautics and Energy sectors, CS is a long-established player in the field of cybersecurity. Novidy’s would be an ideal complement to the market positioning of CS, and would allow it to accelerate its development in France, then elsewhere in Europe, thanks to:
  • a large sales network and firm base in complementary client sectors,
  • a managed services offering (Security Operation Center) that complements our product, consultancy and integration offerings,
  • strong technological partnerships,
  • a robust team of Consultants.

Taking over the entire capital of Novidy’s and bringing it our cybersecurity division would create a new entity within the CS group worth over 40 M€ of revenue (about 20% of Group revenue), with over 200 staff, making us one of the leading French players in this buoyant market.

The goal of CS in the field of cybersecurity is to position ourselves as one of the TOP 5 French service providers:
  • becoming the leading supplier in France for Operators of Vital Importance,
  • supporting clients in the protection of information systems, IT communications systems, and industrial and embedded systems,
  • expanding our customer base and providing a complete service offering (design, build, run),
  • promoting solutions labelled "France cybersécurité"  for the security of infrastructure, data and cyberdefense,
  • developing in Europe by supporting our clients in the implementation of the NIS (Network & Information Security) Directive and the General Data Protection Regulations.

Planned takeover framework with Novidy’s 

The takeover bid aims to associate the founders of Novidy’s with the successful development of CS and its cybersecurity business, while optimizing both the financial structure of the group and benefits for its shareholders.

The transaction concerns 100% of Novidy’s shares and is based on an enterprise value of 35.6 M€, which is 11.3X the EBIT for 2017 (3.2 M€) plus net cash of 6.8 M€ as of 31 December 2017.

The Novidy’s acquisition would be carried out as follows:
  • About 70% of Novidy’s capital would be acquired in cash for 30 M€, financed by a loan;
  • About 30% of Novidy’s capital would be brought to CS in return for:
> the issue of 1,071,060 new shares, representing 5.2% of capital, issued at a unit price equal to 6.39 €, with a 3-year commitment to hold 81% of the shares,
> the issue of 868,871 warrants giving entitlement to between 868,871 and 1,068,871 CS shares (prepaid strike price). The exercise of these warrants would be conditional upon presence of their holders after a period of 3 years; low, median or high limits would be reached when the annual growth rate of the EBIT of CS cybersecurity business would be lower than 15%, between 15 and 20%, or above 20% respectively.
This operation is subject to the information and consultation process concerning CS staff representative bodies, checking by foreign investment bodies, and the Annual General Meeting on 26 June 2018. A "document E" will be submitted to the MFA and made available to the shareholders.

Second phase of Ambition 2021 plan: 10 M€ capital increase

To allow us to continue external growth as part of our development plan, the group plans to increase its capital by approximately 10 M€ next July.

Sopra Steria Group, which owns 11.4% of our shares, has declared its support for the Ambition 2021 plan presented by CS and has expressed its willingness to underwrite 75% of the capital increase, subject to the usual conditions for this type of operation and guaranteeing its implementation.

This capital increase plan will also be presented for approval at the General Meeting on 26 June. A prospectus describing the details of the capital increase will be submitted to the MFA for approval.

CS is a major actor in the design, integration and operation of mission critical systems. CS is listed on the Euronext Paris stock markets – Compartment C (Shares: Euroclear 7896 / ISIN FR 0007317813). 
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