CDP’s Valvitalia buys Nuova Giungas from Xenon and Finint

According to a source familiar with the matter, Valvitalia acquired the targeted company exclusively with cash from its balance sheet. The deal saw the holding company Prodigy fully exit the business. NEIP III, a private equity vehicle managed by Finint, and Xenon hold stakes in Prodigy. Both GPs were not available to comment at the time of publication.

Following the transaction, isolation joints producer Nuova Giungas will complete the product offering of Valvitalia, which mainly produces valves for the industrial sector with a focus on the oil and gas market.

Prior to the transaction, Valvitalia expanded into the fire prevention sector across the acquisition of two Italian businesses, Eusebi in 2015 and Silvani in 2014. Both transactions were entirely funded from the company's balance sheet.

According to a source close to the situation, Valvitalia will confirm the company's 2015 financial performance before the end of 2016. The source said the company had performed well, taking the depressed oil and gas market into consideration. The main reason is the company's focus on the gas segment and the on-shore plants industry rather than oil and off-shore, the source said. The company produces valves for the energy industry and fire prevention sector.

More recently, the GP was reported to be considering an IPO for the business, but in the aftermath of the sector crisis, the announcement was postponed as a result of market turmoil, according to the source.

Previous funding
In 2011, Xenon acquired a controlling stake in Nuova Giungas, according to local reports.

In December 2015, NEIP III made its first investment by acquiring a 25% stake in the business from existing investor Xenon, which retained a 66% stake, while the management team bought a 9% stake. According to a statement, the company generated turnover of €13m at the time of the transaction.

In December 2013, CDP Equity - formerly known as Fondo Strategico Italiano (FSI) - acquired a 49.5% stake in Valvitalia for €151m via convertible bond, while the founding Ruggeri family retained the controlling stake.

The GP currently retains the minority stake in the business via its holding vehicle, FSI Investimenti, in which the GP owns a 77.12% stake, while the Kuwait Investment Authority retains the remaining 22.88% stake. The business has 12 production plans with 1,400 employees and generated €455m in revenues in 2015.

Company
Founded in 1965 and headquartered in Formigine, near Modena, Nuova Giungas produces monolithic isolation joints for the industrial sector and has two production plants with 36 employees.

According to a statement, the business generated a turnover of €7m in 2015 with a reported €400,000 EBITDA and €3.3m net debt.

People
Valvitalia – Salvatore Ruggeri (founder).

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