Tikehau to buy stake in Euro Group

The deal, which will be signed in the coming weeks, gives the company an enterprise value of around €250m, which equates to 6-7x its €35-40m 2019 EBITDA.

Tikehau has been advised by Banka Akros in the negotiations.

Euro Group started a sale process in October 2019, when it mandated Banca Imi and UniCredit to find a buyer for a minority stake.

The company has been in negotiations with other private equity firms as well over the last year, including Ambienta, TowerBrook and FSI, according to press reports.

Headquartered in Milan, Euro Group specialises in manufacturing steel components for electrical motors. It controls a group of companies including Eurotranciatura, which produces electrical steel laminations; Corrada, a specialist in carbide dies; Euroslot, which manufactures notched laminations; Alcast, a die-cast rotors expert; and SAF, which makes dies for small electrical motors.

The group employs 1,950 staff and generates EBITDA of around €35-40m from revenues of €400m. Euro Group is owned by the founding Iori family.

Tikehau's acquisition will be financed with capital from the T2 Energy Transition Fund, which was launched in partnership with Total in March 2018. The vehicle held a first close on €350m in December 2018 and has raised €510m so far. Tikehau and Total committed €200m to the fund, while the remainder was raised from two anchor investors – investment bank BPI France and French insurance company Groupama – and from several European institutional investors and family offices.

The fund targets medium-sized companies based across Europe operating in three key sectors of energy transition: clean energy production; low-carbon transport; and improvement in energy efficiency, storage and digitalisation. The vehicle deploys equity tickets in the €25-75m range.

Tikehau has increased its investment activity across the Italian mid-market in recent years. The Italian private equity arm of the firm is led by Roberto Quagliuolo, in coordination with Luca Bucelli, head of Tikehau Capital in Italy. The team was recently strengthened with the appointments of three new hires: Domenico Paglia, Edoardo Girelli and Damiano Pedergnani.

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• Topics
• Expansion
• Southern Europe
• Industrials
• Italy
• Tikehau Capital
• Minority investing