CA - East 72 Dynasty Trust - D'Ieteren Group: Belron's Performance Is A Gigantic Windfall

2024-04-14 11:20:00 ET

Summary

• D'Ieteren is the only realistic avenue for public investment in Belron.
• Dynasty Trust started acquiring shares in D'Ieteren in the third quarter of 2023.
• D'Ieteren's entry point to Belron came in July 1999 when SAB decided to exit its 68% stake in PGSI.
• For D'Ieteren, the performance of Belron has been a gigantic windfall, which keeps on giving.

The following segment was excerpted from this fund letter.

D'Ieteren Group SA ( SIETY , SIEVF )

Belron is one of the premier global businesses we have come across, but it's really only in the past five years that a confluence of factors have come together to enable it to earn the returns commensurate with its global positioning. Belron has virtually every beneficial attribute outside of an IT growth or natural monopoly business you could wish to find. Market leadership in every one of its major markets, pricing power, network effect, a material technology advantage in an industry where technological change - in vehicle glass - becomes a moat of vast significance. The company produces prodigious cash flow which has facilitated generous dividends and capital returns to the equity owners via private equity-style financial engineering and debt refinancing.

Since late 2021, Belron has been owned by four shareholder groups:

• Staff and management with 11%;
• The private equity group Clayton, Dubilier and Rice (CD+R) via an SPV (20.5%);
• An investor group of San-Francisco based Hellman & Friedman, Singapore's GSIC and Blackrock (18.2%); and
• The Belgian listed, family-controlled conglomerate, D'Ieteren Group with 50.3% and which is equity accounted in D'Ieteren's books.

Hence, D'Ieteren is the only realistic avenue for public investment in Belron. Moreover, since D'Ieteren is 63% controlled by the eponymous family whose predecessors incorporated the company as a coach builder in 1805, and is only listed in Brussels, plus there are other assets within the holding company, the vast majority of investors seem happy to let the opportunity pass by....

For further details see: