CVC to finance Deoleo capital increase

Alessia Argentieri
27 March 2020

Tweet
Facebook
LinkedIn
Google plus
Send to

CVC Capital Partners-backed Deoleo has launched a €50m capital increase, following its restructuring agreement with its creditors.

According to the deal, which is expected to close in June, Barings, Avenue Capital, Angelo Gordon, Alchemy and Cheyne Capital will swap around €283m of debt into a 49% equity stake, while CVC will own the remainder.

The deal includes an injection of equity via a €50m capital increase, €40m of which will be provided by CVC.

The restructuring agreement will reduce the company's debt, previously amounting to €575m, to €242m.

Previous funding
Deoleo went through a turbulent time during the financial crisis, following its purchase of Bertolli from Unilever in 2008. Its financial debt rose substantially and the business was forced to divest its rice division, sold to Ebro Foods for €205m, refocus on its core olive oil production and raise new capital.

In early 2009, its shares were increased, the top management was replaced and a restructuring process was initiated due to the delicate economic situation that the company was experiencing. In 2011 Deoleo started to grow again, launched new products and completed some strategic add-ons, including the acquisition of Hojiblanca.

The company was put up for sale by Spanish banks in July 2013, with JP Morgan running the sale process. The asset attracted the attention of several private equity firms, including Italian state-backed Fondo Strategico Italiano. CVC emerged as the favoured bidder for the asset in April 2014, having made the strongest offer.

The GP purchased 29.99% of the company's shares at 38 cents apiece, a price valuing the company at €439m. The offer was for shares owned by Bankia, Banco Mare Nostrum (BMN) and Dcoop. Spanish securities market regulator CNMV approved the deal in November, despite agreeing with shareholder objections that the price undervalued the business. Subsequently, CVC increased its stake in Deoleo to 48% in January 2015.

The company completed a €25m capital increase in April 2018. Following the deal, OLE Investments – an indirect investee of CVC Capital Partners VI, Deoleo's majority shareholder – reached control of 56.4% of the company's share capital. In addition, more than 2,000 minority shareholders participated in the capital increase.

Company
Founded in 1990 as Grupo SOS and subsequently rebranded in 2011, Madrid-based Deoleo manufactures, distributes and retails olive oils, vegetable oils, condiments and olives. It markets its olive oil under several international brands, including Bertolli, Carbonell, Carapelli and Sasso. It has a presence in 80 countries worldwide, with production facilities located in Spain and Italy, and sales offices in 15 countries.