Deal in focus: Ardian and Consilium sell Rollon

Amy King
02 December 2013

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In mid-November, after almost a year of negotiations, Ardian and Consilium sold Rollon, an Italian manufacturer of liner rails and actuators, to French GP Chequers Capital and Italian investor IGI.

The enterprise value upon exit is understood to stand upwards of €100m – compared to €48.9m at the time of the original buyout.

"We were approached by the buyers around a year ago, through IGI," explains Paolo Bergonzini, managing director and head of the Italian LBO small market enterprise capital team at Ardian. "They immediately showed very strong interest. IGI had previously completed a successful deal that involved the current Rollon CEO so they had first-hand experience."

The sale process launched in Q2 2013, led by Banca IMI and Lincoln. "We only wanted to sell to a private equity fund, not a trade buyer, in line with the expectation and wish of the management team," says Bergonzini. "We had a combination of significant growth potential and a young team that hadn't been in the company for very long. For that reason, we decided to stick to a private equity sale. We had significant interest from non-Italian funds. Generally speaking, we're seeing increasing interest in Italian deals from international funds without an office in Italy."

The private equity duo originally acquired the asset in 2010. Ardian took a 51.8% stake, management bought a 5% share and Consilium retained the remaining shares, according to unquote" data. Ardian invested via the €353m Axa Expansion II fund, with Consilium committing capital via its €150m Consilium Private Equity Fund. The latter GP enjoyed returns of 3.3x money and an IRR of 42.9%, according to market sources.

"2009 was the peak of the crisis for many companies. What impressed us with Rollon was that despite a drop in sales, the firm maintained a 25-27% EBITDA margin. We started our deal with a very solid basis," Bergonzini explains. "The company has a very diversified client base in terms of names and industry. It had a real strength in terms of market position and emerged from the crisis in very good shape."

Weather the storm
As European markets began a slow recovery from the crisis, Rollon exceeded expectations for revenue growth thanks to several company strengths. "The first area of strength was the management team, which had been reinforced in 2008 and 2009 with a new group CEO, Italian CEO and US CEO. It was a new team, ready to develop the business, especially in foreign markets. The second positive was that the company successfully became a leader in the global railway segment, providing linear rails for sliding doors on trains and subways as well as rails to inspect the engine," says Bergonzini.

Under private equity stewardship, Rollon's turnover grew from €27m at the time of the buyout to €53m upon exit. Staff count rose from 207 to 296. The majority of hires came at second-line management level, in order to shore up the company's structure.

"We used our network, particularly in France, to introduce the company to some very large clients. One was Alstom, in the train industry in France. The other is the leader in providing business-class seats for aeroplanes. It's a very nice business with a lot of entry barriers due to safety certification but you must also have light products. We introduced them to the world leader in this industry," Bergonzini explained. Ardian also helped the company complete a bolt-on acquisition; in 2011, Rollon bought Italian actuator producer El More. "We also looked for acquisitions in the US, but I think that will be part of Rollon's future story," said Bergonzini.

People
Ardian – Paolo Bergonzini, Marco Molteni, Michela Peigottu.
Consilium – Stefano Iamoni, Antonio Glorioso, Ruggero Arbues.
Chequers Capital – Jérôme Kinas, Bertrand Rabiller, Xavier Morin, Vivien Le Nestour
IGI – Matteo Cirla, Angelo Mastrandrea

Advisers
Vendors – Studio Gattai, Minoli and Partners, Stefano Catenacci, Gill Mazzoleni (Legal); Banca IMI (M&A); Lincoln, Julian Tunnicliffe (M&A); CBA Studio Legale e Tributario, Diego De Francesco, Luca Pangrazzi (Tax); KPMG, Matteo Contini, Alberto Galliani (Financial due diligence).
Equity – Simmons & Simmons, Andrea Accornero, Moira Gamba, Alessandro Elisio (Legal); Unicredit Corporate & Investment Banking, Giacomo Patrignani (M&A); PwC Transaction Services, Giovanni Tinuper, Alberto Zanatta (Financial due diligence); Nicola Broggi, Marco Vozzi (Tax); Roland Berger, Andrea Marinoni, Alberto de Monte (Commercial due diligence).