Deal in focus: Alcedo completes off-market purchase of Exa

In late February 2016, Alcedo's fourth vehicle backed the €11m management buyout of Italian retail display business Exa Group.

The management team had been looking for new investors back in 2015, and it is understood another buyout house was interested in the business. Nevertheless, Treviso-based GP Alcedo reached an agreement with the company's shareholders without putting the deal into an auction process.

Speaking to unquote", Alcedo partner Franco Valvasori says the key element for the GP's success was their "sector-specific governance expertise, which allowed us to fully understand the company's expansion needs and make the best offer to the management team". Indeed, around 75% of Alcedo's investments have been in the consumer goods and industrial sectors, according to unquote" data.

Our sector-specific governance expertise… allowed us to fully understand the company's expansion needs and make the best offer to the management team" – Franco Valvasori, Alcedo

The deal sees Alcedo partners Marco Guidolin, Franco Valvasori and Michele Gallo joining the company's board and the GP picking up a 51% stake in the company, while the management team acquire a 45% holding.

According to the GP, Exa is one of the few retail display businesses active on an international scale. The company oversees the construction process of retail stores operating in the luxury and fashion sectors. It is headquartered in Milan and its international work is carried out by its subsidiaries in New York, Moscow, Bogotá and Panama. This business structure allows Exa to operate with minimum staff members. In 2015 the company generated turnover of €55m.

Fast moving consumer goods
According to Valvasori, this "lean and flexible structure" is what makes Exa so interesting for private equity. Furthermore, Valvasori says: "The market in which Exa operates is changing quickly. Internet and mobile technologies are redefining the role of retail shops into showrooms. Therefore, fashion and luxury houses need an increasing image turnover and a continuous rebrand process. Therefore, large companies are keen on outsourcing those processes."

Following the deal, Alcedo will look to support Exa's growth both organically and acquisitively. It will look to expand into the hotel and restaurant sectors, and will seek to buy local competitors in order to increase its client base.

After its three-to-five-year investment period, Alcedo predicts an exit via a trade sale. "Even though the possibility of a secondary buyout is still attractive. The market will define the most suitable exit," says Valvasori.

The deal marks the first transaction for Alcedo IV, which is targeting a final close on €190-195m, below its €200m hard-cap, in March 2016. According to the GP, the vehicle aims to complete two more transaction this year.

People
Alcedo – Franco Valvasori (partner).
Exa Group – Giuseppe Polvani, Gianrico Specchio, Paola Pratesi (co-founders).

Further reading

• Buyouts

Alcedo backs €11m MBO for Exa Group

• 19 Feb 2016

• Healthcare

Deal in Focus: Trilantic’s investment in Maugeri highlights structural healthcare reform

• 15 Mar 2016

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