BlueGem buys Italian hair care specialist Pool Service

Alessia Argentieri
30 July 2019

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Private equity firm BlueGem Capital Partners has acquired Italian hair care products manufacturer Pool Service.

The vendors are investment firm Accord Management, which controlled a 76.7% in the business via its holding company Beauty 2; the Cattaneo family, who owned a 20% stake; and the company's CEO, Stefano Banfo, with the remainder.

Unquote understands that the deal values the company at €64m, which equates to around 9x its 2019 EBITDA of €7m. BlueGem bought a 97% stake in the company, while CEO Banfo reinvested alongside the GP and retained the remaining 3%.

This is the first deal made via BlueGem III, a new vehicle recently launched by the GP with a €400-500m target.

BlueGem plans to boost the company's growth and pursue a buy-and-build strategy by acquiring additional businesses based in Italy, but with a strong presence in international markets, especially in the US. Following this acquisition strategy, the GP expects the company to reach revenues of €100m with an EBITDA margin of 15% by 2022, Unquote understands.

The deal ends a sale process started in January 2019, when Accord appointed Lincoln as financial adviser to run the sale; it received several preliminary proposals from industry players and private equity funds, including Ardian, Peak Rock, Mandarin Capital, Ergon Capital, Wise, Argos Wityu and Alto Partners.

According to press reports, Aksia, BlueGem and L Catterton were admitted to the second round of the auction process in May and in June it was reported that Aksia was close to signing a deal.

Previous funding
Accord acquired a minority stake in Pool Service in 2013, investing alongside private equity firm Riello Investimenti, which bought a majority holding, and the Cattaneo family, who retained a 20% stake. Subsequently, Accord increased its stake in the business in 2016 by acquiring an additional 40% from Riello in a deal that valued the company at around €46m.

Company
Pool Service develops and manufactures hair care products, including colouring and bleaching products, hair treatments free of allergens and parabens, styling products, and cleansing and nourishing treatments.

The company markets its products under several brand names, such as Milano Hair and Hair Company Professional, and controls the Medavita brand, which specialises in hair treatments and styling products.

Pool Service is headquartered in Cairate, near Varese, and generates EBITDA of around €7m from revenues of €40m.

People
BlueGem Capital Partners – Emilio Di Spezio Sardo (co-founder, partner).
Pool Service – Stefano Banfo (CEO).

Advisers
Equity – Deloitte (M&A); Latham & Watkins (legal); Gattai Minoli Agostinelli & Partners (tax); New Deal Advisors (financial due diligence); Willis Towers Watson (insurance due diligence).
Company – Lincoln International (M&A); Pedersoli Studio Legale (legal); Goetzpartners (financial due diligence); Deloitte (operational due diligence).