Astorg acquires Surfaces Technological Abrasives

Alice Tchernookova
17 July 2017

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Astorg has agreed to buy a majority stake in Italy-based company Surfaces Technological Abrasives, taking over from previous investor Xenon Private Equity.

Following the transaction, Astorg's stake will amount to 75%, while Xenon will retain 5% and the balance will go to management, a source familiar with the matter revealed to unquote".

Astorg is currently investing from the Astorg VI fund, closed last year on its €2.1bn extended hard-cap. The GP invests principally in global B2B companies headquartered in Europe with an enterprise value of around €600m-1bn. With the vehicle, the GP has already invested in electrical equipment company Audiotonix, software group AutoForm, pharmaceuticals group HRA Pharma and parking services provider Parkeon.

Xenon Private Equity VI acquired its majority stake in the company in 2015, investing from the €184m Xenon Private Equity VI fund.

The company's current shareholders, as well as management, reinvested significantly alongside Astorg, the GP said in a statement.

In December 2016, Surfaces completed a merger with Thiene-based company ADI, specialised in the manufacturing of super-abrasive tools for the stone, ceramics, glass and optical sectors. Following the merger, the new business was set to generate a combined turnover of €55m.

Astorg will now aim to help Surfaces enter its next phase of development, with plans to focus on international growth both organically and through acquisitions, the investor said in a statement.

Debt
According to a source familiar with the matter, a debt package that will support the transaction is "currently under negotiation".

Previous funding
In December 2015, Xenon committed capital from its €184m fund Xenon Private Equity VI to acquire a 60% stake in Surfaces. Management retained the remaining 40% stake.

The acquisition was partially financed by some €15m of debt comprising €8m of senior debt and revolving credit underwritten by Cariparma Crédit Agricole and a €7m mezzanine strip underwritten by Emisys Capital.

Company
Founded in 2010, Surfaces supplies abrasive tools and other consumables used during the manufacturing processes of high-end ceramic, stone, glass and optical products. The company also manufactures smoothing, polishing and blasting equipment.

Based in Cenate Sotto, in the Italian province of Bergamo, Surfaces generated sales of €23.5m in 2015 and employed 40 people with an EBITDA margin of approximately 40%.

People
Xenon Private Equity – Franco Prestigiacomo (founding partner).
Emisys – Philippe Minard (founding partner).
Astorg – Lorenzo Zamboni (partner).
Surfaces Technological Abrasives – Gaetano Maffei (CEO).

Advisers
Equity – EY (financial due diligence, corporate finance, tax); Fineurop (M&A); Bonelli Erede (legal).