Mega-deals case study: Autogrill

The value of the Italian buyout market has consistently increased over recent years, and has long been as an interesting one for international investors. It also represents fertile territory for ‘mega-deals’ of over €1bn, and produced three such deals in 2003, producing Europe’s largest buyout to date when a consortium comprising BC Partners, CVC Capital Partners, Investitori Associati and Permira acquired SEAT Pagine Gialle from Telecom Italia for a total of €5.65bn. Earlier in the year, The Carlyle Group led the €1.6bn buyout of FiatAvio, and CSFB Private Equity’s €1.5bn buyout of the eyewear manufacturer Safilo. Local firms BS Private Equity and Investitori Associati have enjoyed success on the fundraising side, whilst new player Clessidra is on track to hold a final close on €1bn in the first half of this year.

On the back of this fundraising success and strong dealflow, industry insiders are speculating over the source of Italy’s next mega-deal. The market is now set to receive a further boost via the imminent sale of Autogrill, which operates restaurants at motorway service stations, airports and railway stations. Edizione Holding, which is owned by the wealthy Benetton family, holds a 57% interest in the company, estimated to be worth around €1.7bn. The Benettons are widely believed to have been examining sale options for some time now, with Goldman Sachs currently assessing various possibilities, including a sale to a private equity buyer. Recent reports suggest that nine buyout firms grouped together in four consortia have expressed an interest in Autogrill. BC Partners and CVC joined forces with Investitori Associati, whilst Permira has teamed up with Cinven and Bain Capital. Kohlberg Kravis Roberts is partnering with Clessidra, in what would be the Italian firm’s first deal. The French buyout firm PAI has allied itself with an industrial player, the contract catering company Sodexho Alliance.

The sale of Autogrill would go some way to reducing the debt Edizione Holding had accumulated from investments in the Telecom Italia SpA holding company Olimpia SpA, Banca Antonveneta and Autostrade SpA, the motorway restaurant operator. Furthermore, the sale could also clear up some regulatory issues for the Benettons, with the Italian Antitrust Authority currently examining a conflict of interest arising from Edizione Holding's control of both Autostrade and Autogrill.

Key Autogrill facts

·Provider of food and beverage services; also retails consumer and travel products at outlets on motorways, airports and railway stations·Turnover of around €3.32bn in 2002·The company is controlled by Edizione Holding, the Benetton family’s financial holding, which owns 57.09% of the equity·Around 40,000 employees·Operates in 14 countries worldwide·Over 4,300 outlets in 900 locations

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• Southern Europe
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• Technology