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NB Renaissance Partners (NBRP), Neuberger Berman's Italian private equity branch, has acquired a majority stake in hydraulic components specialist Hydro Holding.

The vendors are Sino-Italian GP Mandarin Capital Partners (which controlled a majority holding in the company), Atlante Private Equity (which owned a 20% stake), the company's founding families and other minority shareholders, including private equity house Route Capital Partners.

The Vaghi, Facondini, Brivio and Cerase families, founders of Hydro subsidiaries Tieffe, FB Hydraulic, Raccorfer and MCS Hydraulics respectively, will reinvest alongside NBRP, retaining a minority interest in the business and key management roles in the group.

Previous funding
Hydro was established by Mandarin Capital in 2014 as a buy-and-build platform aimed at creating a pool of companies specialising in manufacturing hydraulic components.

Route Capital Partners acquired a minority stake in Hydro in 2014 via its fund RCP Uno, investing alongside Mandarin Capital.

Hydro completed its first acquisition in December 2014, when it bought Tieffe from private equity firm Opera and the company's founders, the Vaghi family, who reinvested in the business and retained a minority stake. The GP's capital for the acquisition was drawn from its second fund, Mandarin Capital Partners II, which held a final close on €195m in January 2016.

Subsequently, Hydro bought FB Hydraulic in September 2015 from the founders, the Facondini family, who reinvested in the business. As part of the deal, Atlante (controlled by Imi Fondi Chiusi) acquired a 20% stake in Hydro.

More recently, Hydro bought Raccorfer in July 2017 and MCS Hydraulics in December 2017 from the Brivio family and the Cerase family, respectively, who both reinvested in the group.

Company
Established in 2014 and headquartered in Modena, Hydro controls four Italian companies specialising in the production of hydraulic components: carbon steel fittings manufacturer Tieffe, hydraulic fittings, hoses and pipe producer FB Hydraulic, steel components manufacturer Raccorfer and stainless steel fittings specialist MCS Hydraulics.

The group operates four production plants located in Italy and one in the Czech Republic. It employs a staff of 310 people and has a presence in 60 countries worldwide. Hydro expects to generate revenues of €60m and a 25% EBITDA margin in 2018, of which 80% comes from outside of Italy.

People
NB Renaissance Partners – Marco Cerrina Feroni (senior partner); Michele Quaranta (partner).
Hydro Holding – Davide Facondini (chair).

Advisers
Acquirer – Gatti Pavesi Bianchi (legal); Boston Consulting Group (commercial due diligence); New Deal Advisors (tax); Studio Chrea (tax); Essentia Advisory (corporate finance).
Vendor – GCA Altium (corporate finance); Fineurop Soditic (financial due diligence); Roland Berger (commercial due diligence); LMCR (legal); PwC (tax); Deloitte (tax).