Itago IV holds €60m first close, buys SR-Mecatronic

"Our track record and the successful performance of our portfolios, alongside our deep knowledge of the Italian market and our ability to select high-growth potential assets, have attracted the interest of several new investors despite the pandemic," Itago co-CEO Domenico Tonussi told Unquote. "We expect to further expand our LP base in the coming months, with the addition of both Italian LPs and some European investors."

The fund has also inked its first deal by acquiring a 70% stake in Italian company SR-Mecatronic, a manufacturer of satellite systems and air conditioning units for caravans and campervans. Following the deal, the company's founder and CEO, Marco Santoli, will retain the remaining minority stake in the business.

SR-Mecatronic generates EBITDA of €2.5m from annual turnover of around €10m, selling its products across Europe and Australia. Itago plans to boost the company's growth and double its revenue in the next three years.

Itago IV was launched at the end of 2019 with a €120m target. The GP expects to hold an interim close this summer and a final close by the end of 2021.

The fund is managed by a team composed of Domenico Tonussi, Nicola Bordignon, Piergiorgio Fantin and Daniele Mondi.

The GP is also managing NEIP III, a €75m private equity vehicle that closed in 2011. The fund is currently 90% deployed and plans to make a couple of bolt-ons in the coming months. It has a portfolio composed of four companies: baked goods producer Panificio San Francesco; handling machinery business CVS Ferrari; ISA-Altanova Group, a manufacturer of test and measurement systems for the energy industry; and leather tanning equipment manufacturer Spraytech.

Legance – Avvocati Associati and Gatti Pavesi Bianchi Ludovici advised Itago on the first closing, while EY (financial due diligence), NCTM (tax) and Pavia Ansaldo (legal) advised the GP on the acquisition of SR-Mecatronic.

Investors
Itago IV has raised commitments from Fondo Italiano d'Investimento as cornerstone investor and other private investors, including a banking foundation. 

The fund plans to attract several institutional investors – both Italian and from the rest of Europe – in the coming months. It intends to raise 70% of its capital from Italian pension funds, funds-of-funds and insurance companies, and the remainder from high-net-worth individuals and family offices.

Investments
Itago IV invests in Italian SMEs generating revenues of €10-50m and EBITDA in the €3-6m range, operating primarily in the manufacturing, machinery, services and food sectors.

The fund mainly targets majority stakes, but will also consider acquiring considerable minority stakes in larger deals. It deploys equity tickets in the €8-15m range and applies moderate leverage of up to 2.5x EBITDA.   

"We have several interesting opportunities in our pipeline, primarily across non-cyclical sectors that have proved their resilience throughout the pandemic," Tonussi told Unquote. "We expect to ink two more deals in the coming months, one in the food-tech sector and one in the healthcare industry."

People
Itago – Domenico Tonussi, Nicola Bordignon (co-CEOs).

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