San Giorgio in sale talks with Ergon, reviews valuation expectations

The company restarted sale talks after a pause over the summer, the sources said, and is now aiming for a lower valuation. Before the summer, the vendors were looking for a valuation at around 12x San Giorgio's EUR 11m 2019 EBITDA, but have since lowered their expectations, the sources said.

Before the coronavirus outbreak, multiples in San Giorgio's space ranged between 12x and 15x EBITDA, but the pandemic has created a new reality, one of the sources said.

The pandemic has also heavily impacted the company's revenues. It posted EUR 6m EBITDA in 2020, but anticipates turnover will return to 2019 levels by the end of this year and forecasts around EUR 12m to EUR 13m in 2021 EBITDA, as reported.

Houlihan Lokey is still advising the sell-side, the sources said.

The owning Bruno family is looking to sell a minority stake in San Giorgio via a capital increase, as reported. It initially decided to explore a sale last year, prompted by evident appetite for companies in its niche from both sponsors and industry players, and was intending to sell a majority stake. But unfavourable market conditions impacted the process and slowed it down, the sources said.

San Giorgio, based in the Salerno province, was founded in the 1980s by entrepreneur Sabato Bruno, whose family still owns the business. It makes baked and part-baked goods, including bread and croissants, for commercial customers.

Ergon already owns Italian frozen baked goods producer Dolciaria Acquaviva, which it bought in 2019.

Houlihan Lokey declined to comment. Ergon and San Giorgio did not return requests for comment.

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• Topics
• Expansion
• Southern Europe
• Consumer
• Ergon Capital Partners
• Italy