Advent buys IRCA in SBO from Carlyle

Wahida Ahmed
12 April 2022

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Advent International has acquired Italy-based bakery and artisanal ingredients company IRCA from Carlyle.

The deal values IRCA at EUR 1bn, according to a report from Reuters.

Francesco Casiraghi, a managing director at Advent, told Unquote that Advent has a majority stake in the business of more 95%, while the management team has a customary equity package. The company's CEO is continuing in his role and reinvesting for a minority stake.

Casiraghi told Unquote Advent invested via Advent International GPE IX. The fund held a final close on its hard-cap of USD 17.5bn in June 2019. The vehicle invests in companies based in North America and Europe with enterprise values between USD 50m - USD 3.5bn across the healthcare, industrial, consumer, TMT and retail sectors. It deploys equity tickets in the range of USD 100m - USD 1bn, according to Unquote Data.

With the support of outgoing PE backer, Carlyle, the business received investment in its manufacturing capabilities. In addition, diversified its product offering through the acquisition of Netherlands-based chocolate decoration producer Dobla in 2018. It also underwent geographic expansion in markets including the US, according to a press release.

Under Advent's ownership, the company will seek to continue scaling in Italy and internationally, while expanding its products portfolio to incorporate high value-add products in adjacent markets , according to a press release. Casiraghi added that the sponsor has ambitious growth plans and will be putting together a diverse international board.

Mergermarket reported in April 2022 that first-round bids for IRCA were due in early April. The company was marketed based on an expected 2022 EBITDA of EUR 75m. The report noted that IRCA reported 2021 revenues of EUR 365m with an EBITDA margin of 18%. The company expects to generate more than EUR 420m in revenues in 2022 as a result of strong sales in international markets, the report noted.

Casiraghi confirmed the aforementioned figures. He added that the sale process took place via a small auction with a few players including strategic and financial buyers.

Carlyle declined to comment.

Carlyle bought the business in June 2017 in a EUR 520m SBO from Ardian, deploying equity via Carlyle Europe Partner IV. The fund held a final close on EUR 1.25bn in August 2013. It targets European upper-mid-market companies across a wide range of sectors making leveraged buyout investments of EUR 125m - EUR 275m. The fund is fully deployed, according to Unquote Data.

Company
IRCA was established 1919 and is headquartered in Gallarate, Italy. It operates on a B2B channel supplying customers with baked goods, ingredients, and confectionery. The company has more than 400 wholesaler and distributors and it operates across 100 countries.

People
IRCA - Paolo Perego (CEO).
Carlyle - Filippo Penatti (managing director).
Advent International - Francesco Casiragh (managing director).

Advisers
Vendor - Rothschild & Co (corporate finance); BNP Paribas (corporate finance); Latham & Watkins (legal).
Equity – Vitale (corporate finance); Morgan Stanley (corporate finance); BonelliErede (legal).