Bain explores strategic options for Fedrigoni

Mergermarket
14 February 2022

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Bain Capital has started a review of its strategic options for Fedrigoni that could lead to a stake sale or an IPO on the Milan Bourse, seven sources familiar with the situation said.

The Italy-based producer of speciality and commodity papers and self-adhesive labels company has been attracting market attention as it enters its fifth year of private equity ownership, three of the sources said, adding that Bain will decide which route to take between March and April.

Investment banks are yet to be appointed to work on a potential deal, all the sources said. The company's management has recently arranged informal meetings with banks pitching for a mandate, the sources added.

However, the company is still not formally conducting a beauty context as it is focusing on its acquisitive growth, two of the sources said, confirming a recent press report.

Bain is expected to pick up the sellside advisors among Rothschild, Lazard, BNP Paribas and HSBC, due their familiarity with this business, three of the sources said.

Rothschild, Bain, Fedrigoni declined to comment. Lazard, BNP Paribas and HSCB did not return request for comment.

The company expects to have its 2021 financial results and its new industrial plan ready in March before deciding on its strategic options, two of the sources said.

Fedrigoni's 2022 EBITDA is expected to be around EUR 250m, these sources added.

The preferred route for a deal would be an IPO on the Milan bourse, but given the current volatility of the capital markets, management will be more likely to opt for a minority stake sale as a first step, all the sources said. The stake coming up for sale would be of a relevant size, one of the sources noted. According to another source, it would be as high as a 49% stake.

Several large sponsors are expressing elevated interest in the asset, three of the sources said, adding that given the deal size, which is expected to be as high as EUR 2bn-EUR 2.5bn, it would be a target for only a few sponsors.

Fedrigoni's sector is seen as very hot and the group has a recognisable and strong brand, a sector banker noted, adding that the business is profitable, with strong cash generation.