Italian dealflow wakes from slumber

Amy King
29 November 2013

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Italian dealflow soared in October, with overall deal value for the month exceeding the total values across all previous quarters this year, according to unquote” data. Amy King reports

In the mega-buyout space last month, Fondo Strategico Italiano bought an 84.55% stake in Ansaldo Energia in a secondary buyout from First Reserve. The deal valued the firm at more than €1bn.

Finmeccanica sold 39.55% of its 55% stake and First Reserve divested its 45% shareholding. Fondo Strategico has agreed to acquire Finmeccanica's remaining stake by 2017, supported by a further deferred payment of €116.5m. The agreement also includes an earn-out payment of up to €130m, linked to the achievement of certain targets between 2014-2016. The new owner plans to expand Ansaldo Energia's international industrial partners to boost the growth of the firm abroad.

Other notable transactions include Apax Partners' acquisition of automotive parts distributor Rhiag-Inter Auto Parts Italia from Alpha. The transaction is expected to close at the end of 2013, with financing provided by BNP Paribas and Credit Suisse. Market estimates place the valuation upwards of €500m, or approximately 7.5x earnings.

In fashion
The local fashion industry continued to exert its indomitable pull on private equity. Local and international GPs continue to circle Versace, while Trilantic Partners Europe penned a deal with Betty Blue. The GP bought a minority stake in the fashion and accessories firm, which operates the premium Elisabetta Franchi brand. Trilantic intends to drive the international expansion of the company, with attention given to growth in south-east Asia.

Also of interest in the Made in Italy market was Alto Partners' sale of espresso machine maker Rancilio Group to Ali Group, a global catering firm. In 2007, Alto bought a 16.67% stake in the company via a limited auction process managed by KPMG. The investor announced a buy-and-build strategy to drive the firm's growth. In 2008, Alto upped its stake to 31% via a capital increase. The exit saw Alto reap a 3x money multiple and 20% IRR on the transaction. Seven companies remain in the portfolio of Alto Capital II following the latest divestment.

And further exits lie on the horizon, following news that Moncler is set to list on Italian stock market, having pulled the plug on a planned IPO in June 2011. The company is owned by Carlyle, Progressio Investimenti and listed French investment firm Eurazeo. Moncler has enjoyed a seven-year courtship with private equity, which began in 2006 when Mittel Private Equity, Progressio and Istituto Atesino di Sviluppo (ISA) acquired 35%, 22% and 4% stakes in the business respectively.

Things were a little quieter on the fundraising side, although Italy did welcome a new investor to the local landscape. Emisys Capital launched in mid-October and announced the first closing of its maiden vehicle, Emisys Development, on €131m. The company will make hybrid investments combining equity and debt in Italian SMEs across various sectors to fund international expansion.

Financial group Gruppo Fineurop and IMI Investimenti, the investment arm of Intesa Sanpaolo, have also committed to the vehicle, alongside family offices and private investors. Fondo Italiano di Investimento has continued in its crucial role as a fund-of-funds with a €30m commitment to Emisys Development, matched by an equal contribution from the European Investment Fund.

In late October, Fondo Italiano injected a further €30m into Ambienta Fund II, which held a first close on more than €147m. The commitment to the environment-focused fund, which has a €300m target, was the first made by Fondo Italiano to a sector-specific vehicle. Around 40% of the capital raised at first close was committed by new backers of Ambienta and included the European Investment Fund, Credit Suisse, Hermes, Unigestion and several US and German family offices.