Bain Capital, NBRP invest in Engineering

The deal values the company just north of €1.6bn, which equates to 10x its 2019 EBITDA, Unquote understands.

NBRP will reinvest in Engineering alongside Bain Capital; the two GPs will hold a stake just shy of 50% each.

The company's management team, led by CEO Paolo Pandozy, will also reinvest in the business, while Apax and the company's founder Michele Cinaglia will fully exit the investment by selling their 44% and 12% stakes, respectively. 

A debt package to support the deal was provided by a pool of Italian and international banks, including Banca IMI-Intesa Sanpaolo, Unicredit, BNP Paribas, Credit Suisse and Deutsche Bank. 

Bain Capital invested in the company via Bain Capital Europe V, a €4.35bn vehicle that closed in July 2018; while NBRP deployed capital primarily from its third fund, NBRP III, which is currently fundraising.

Under Apax and NBRP's ownership, Engineering increased its revenues from €185m in 2015 to €1.3bn in 2019, its EBITDA from €105m to €160m and its staff from 8,100 to 11,000 people. Furthermore, the company enlarged its product offering and completed 19 add-ons both in Italy and in the rest of Europe, becoming a consolidation platform in the IT sector.

Previous funding
Engineering was listed on the FTSE MIB segment of the Italian stock exchange in 2000. One Equity Partners acquired a 29.9% stake in the business for €116.6m from the management team in June 2013. 

Apax, via its $7.5bn Apax VIII fund, and NBRP bought a 37% stake in the company in February 2016 at €66 per share, representing an 18.1% premium at the time. Subsequently, the GPs acquired an additional 8% for €68m from existing shareholder Bestinver in April 2016.

They also bought One Equity's 29.9% stake, and an additional 24% stake for €175.3m, gaining control of 99% of its shares. They delisted Engineering in August 2016. Following the take-private, Apax and NB controlled a 44% stake each, while the founder Michele Cinaglia held the remainder.

Company
Established in 1980 and headquartered in Rome, Engineering provides software and IT services, including business integration, outsourcing and consulting, performance monitoring and predictive analysis to support the digital transformation of public and private companies and organisations.

The business offers a range of platforms for several market segments, including digital finance, smart government, e-health, smart energy, smart mobility, digital telecommunication and multimedia.

Engineering employs 11,000 staff across 65 offices located in Italy, Belgium, Germany, Norway, Serbia, Spain, Sweden, Latin America and the US. It generated EBITDA of €160m from revenues of €1.3bn in 2019.

People
Apax Partners – Gabriele Cipparrone (partner).
Bain Capital – Luca Bassi (managing director at Bain Capital private equity).
NB Renaissance Partners – Fabio Canè, Stefano Bontempelli (senior partners); Michele Quaranta (partner).
Engineering Group – Michele Cinaglia (founder); Paolo Pandozy (CEO). 

Advisers
Equity (Bain Capital) – BNP Paribas (corporate finance); Deutsche Bank (corporate finance); Mediobanca (corporate finance); Bain & Company (corporate finance); New Deal Advisors (financial due diligence); Pirola Pennuto Zei & Associati (legal); Gattai Minoli Agostinelli & Associati (legal).
Equity (NB Renaissance Partners) – Gatti Pavesi Bianchi (legal); Bain & Company (corporate finance); New Deal Advisors (financial due diligence); Di Tanno e Associati (tax); Kirkland & Ellis (legal).
Vendors – Rothschild & Co (corporate finance); Simpson Thacher & Bartlett (legal); BonelliErede (legal); PwC (tax).
Company – Accinni Cartolano e Associati (legal); PwC (financial due diligence).

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