Alto Partners sells Tricobiotos to trade

The deal marks the third exit for Alto Capital IV, which held a final close on EUR 210m in April 2018. The transaction follows the sale of Bergamo-headquartered OFI, a manufacturer of food supplements, dermo-cosmetics and medical devices to Italy-based Farmaceutici Procemsa in December 2020; and Bologna-headquartered CEI Group, a producer of spare parts for commercial vehicles to White Bridge Investments in June 2022.

The average gross IRR for the first three exits is over 40% with a Fund DPI ratio of 73%, according to the press release.

Alto Capital IV also signed last month an agreement to sell Ferrara-headquartered Bia, a producer and distributor of cous cous production, to Bonifiche Ferraresi, a large agricultural group in Italy. The transaction is expected to be completed in mid-October 2022, according to the press release.

The sponsor acquired Tricobiotos in July 2017, taking a majority stake from its founders, Marco and Mara Bucaioni.

CEO Marco Bucaioni will continue to lead Tricobiotos following the deal, according to a press release.

Raffaele de Courten, founding partner of Alto Partners, and director Federico Zaffaroni told Unquote that the company has a strong presence abroad, including in Eastern Europe and Turkey, and has recently acquired a key private label client in Korea.

Under Alto’s ownership, the company grew with a focus on foreign markets, product innovation and sustainability. In 2021, Tricobiotos posted total sales of more than EUR 26m with an EBITDA margin of 20%. In H1 2022, the company posted revenues of EUR 14 million, with an 18% growth over H1 2021, according to the press release. In 2019, it had a turnover of EUR 23m, according to de Courten and Zaffaroni.

As a result of COVID-19, in 2020 total sales went down to EUR 20.3m due to the business operating on a B2B model serving mainly hairdressers which were closed during the lockdown period, de Courten and Zaffaroni said.

Deal background and further investments
The decision to exit Tricobiotos was influenced by the volatility in the market, so Alto decided to accept interesting offers, rather than taking a risk by prolonging the exit, they said. Moreover, the sponsor had met its IRR and cash multiple targets, they continued, adding that its entry multiples have been competitive, so a number of portfolio companies have enjoyed positive multiple arbitrages.

The sponsor kicked off a sale process in which financial and trade buyers were interested. Alfaparf was a buyer that could guarantee the further development of the company as it has around EUR 250m sales, with an EBITDA of EUR 50m and it is cash positive for EUR 150m, they said. Alfaparf bought Tricobiotos in an all equity deal, de Courten and Zaffaroni said.

Alto Capital IV is 82% deployed and the sponsor is exploring one final potential deal, which it hopes to ink by year-end. Furthermore, two portfolio companies within the fund are expecting to complete bolt-ons by year-end, seeking targets in Italy and abroad, they said without disclosing details about the companies. The vehicle targets Northern Italian SMEs in the food, design, luxury, industrial and services sectors with revenues in the range of EUR 20m-EUR 80m, according to Unquote Data.

The sponsor is currently fundraising for its latest vehicle Alto Capital V, which will seek to raise between EUR 200m-EUR 300m, as reported by Unquote. It will pursue the same strategy as its predecessor vehicle.

Company
Founded in 1982 by the Bucaioni family in Vaiano, Tricobiotos produces and distributes professional cosmetic products for the haircare and beauty industries including sprays, shampoos, dyes, among other professional products under its own brands and private labels. Notable clients in Italy include brands such as Moroccanoil, L’Anza, Kezy and Color Wow. Exports account for around 60% of its revenues. The company has 100 employees.

People
Alto Partners – Stefano Scarpis (chairman, partner), Federico Zaffaroni (director), Pietro Marchianò (investment analyst), Raffaele de Courten (founding partner).
Alfa Parf Group – Roberto Franchina (founder).
Tricobiotos – Marco Bucaioni (CEO).

Advisers
Vendor – UBS (Franco Cappiello, Tommaso Poletto, Michele Torella) (financial due diligence); EY Studio Legale Tributario (Renato Giallombardo, Luca Spagna) (legal).

Equity – EY Strategy & Transactions (Francesco Serricchio, Antonio Celenza) (financial due diligence); RDRA Studio Legale e Tributario (Andrea de Panfilis) (legal); Studio BMLex (Cristiano Bacchini, Maria Mazzitelli) (intellectual property).

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• Topics
• Exits
• Southern Europe
• Consumer
• Trade sale
• Italy
• Alto Partners