Mandarin backs hair care specialist Nuova Fapam

Alessia Argentieri
21 October 2020

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Private equity firm Mandarin Capital Partners has acquired Italian hair care specialist Nuova Fapam.

The GP bought a 74% stake in the business, while the founding Parnazzini family retained the remainder, Unquote understands.

"The company performed very well in 2019, generating a high EBITDA margin," partner Andrea Tuccio told Unquote. "Despite the stall in activity caused by the lockdown, we expect to see consistent growth in 2020. This is a resilient sector, with an annual growth rate of between 4% and 5%, and, with our support, the company will be able to deliver high growth and further expand internationally."

Following the deal, CEO Alessandro Parnazzini will stay on with the company and continue to lead the business.

The GP invested via Mandarin Capital Partners III, which has raised €185m so far and has already deployed more than 50% of its capital. It expects to hold a final close by February 2021, the GP told Unquote.

The vehicle has a €250m target and a €300m hard-cap, and typically invests in companies with enterprise values in the €30-70m range and EBITDA of €3-7m, operating in a wide range of sectors, including mechanical engineering, chemicals, cosmetics and food. It deploys equity tickets of €15-20m and follows up with additional capital injections to finance a buy-and-build strategy of up to €30m per portfolio company.

In addition to the equity drawn from the fund, a debt package was provided by a pool of banks led by MPS, Unquote understands.

"We plan to support the company's international expansion in Asia, the Middle East and North America," Tuccio told Unquote. "We also intend to expand Nuova Fapam's offering and scope with the addition of a hair products manufacturer, an acquisition that will enable vertical integration across the Italian hair care sector. We expect to ink this additional deal next year."

Company
Established in 1992 and headquartered in Pescara, Nuova Fapam specialises in hair care products.

Its main brand Screen offers products for colouring and styling, as well as hair treatments and a new line dedicated to men's hair care.

The company has a presence in 68 countries worldwide. It generated EBITDA of €5.5m from revenues of around €20m in 2019, Unquote understands.

People
Mandarin Capital Partners – Andrea Tuccio (partner).
Nuova Fapam – Alessandro Parnazzini (CEO).

Advisers
Equity – Studio Cappelli (legal); Studio Gianni Origoni Grippo (legal); EY (financial due diligence); PwC (financial due diligence); KPMG (commercial due diligence).