Partners Group buys Megadyne in SBO

Unquote understands that the deal values the company at around €1bn, which equates to 17x the company's 2017 EBITDA.

A source familiar with the situation told Unquote that the investment will be made from several Partners Group funds and mandates, including Partners Group Direct Equity 2016, closed on €3bn in July 2017.

The company's founders and minority shareholders, the Tadolini family, reinvested in the business alongside Partners Group. Megadyne CEO Giorgio Tadolini will stay on with the business as executive chairperson, while a new CEO will be appointed by Partners Group.

The sale ends a four-year holding period for Astorg, which acquired a majority stake in the company from Fondo Italiano d'Investimento (FII), the Tadolini family and senior management in a transaction valued north of €400m. The former shareholders reinvested to retain a minority stake in the asset. The transaction involved a debt package provided by Intesa Sanpaolo, BNP Paribas, Crédit Agricole and Natixis. To finance the acquisition, Astorg deployed capital from its Astorg V fund, a €1.05bn vehicle closed in 2011.

FII bought a minority stake in Megadyne for €20m in 2012. The entire FII portfolio was bought by Neuberger Berman in December 2017, including part of Megadyne's holding.

Partners Group's transaction follows the firm's recent acquisition of Netherlands-based conveyor belt manufacturer Ammeraal Beltech from Advent International. The combined enterprise value of the two transactions, which both include investment participation from management teams, is around €2bn.

After closing, Partners Group intends to merge the two companies, which have complementary product offerings, creating a full-service provider across specialist industrial transmission belting and lightweight conveyor belting.

Company
Founded in 1957 and based in Mathi, near Turin, Megadyne produces polyurethane and rubber belts for use in power transmission and conveying systems, as well as a range of complementary products such as rubber hoses and metal pulleys. The company has 30,000 customers across several industries and operates 15 manufacturing plants and 33 distribution centres worldwide. Megadyne employs 2,300 people and generated EBITDA of €59m from revenues of €319m in 2017.

People
Partners Group – Pascal Noth (managing director, private equity Europe).
Astorg – Lorenzo Zamboni (partner).
Megadyne Group – Giorgio Tadolini (CEO).

Advisers
Acquirer – Clifford Chance  (legal); RBC Capital Markets (M&A).
Vendor – Bonelli Erede (legal).
Company – NCTM (legal).

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• Topics
• Buyouts
• Southern Europe
• Industrials
• Partners Group
• Fondo Italiano di Investimento
• Italy
• Astorg Partners
• Secondary buyout