Ersel nabs Arbo from Quadrivio

The deal, valued at €28.2m, enabled Quadrivio to reap a money multiple of 4x on its initial investment. Ersel injected around €14m of equity, while management provided approximately €3m for a 20% stake.

The remaining share capital has been retained by the management team and Andrea and Enrico Bonazzoli, whose family founded ARBO in the 1960s. Ersel's strong relationship with management and its entrepreneurial approach were central factors to its winning the deal.

Ersel's strategy will be to widen the distribution of the company's products and significantly increase the number of owned stores over the next four to five years. It was drawn to ARBO due to its high growth potential.

The business operates in a fragmented market that is likely to consolidate in the coming years so, as well as pursuing organic growth, the business will seek to acquire its small chain competitors, and increase the quality and breadth of its value-added services. The aim is to strengthen ARBO's position as a major Italian firm in the mechanical spare parts sector.

The acquirer invested via its Ersel Investment Club fund, which registered its final close in December 2008 at approximately €85m. The deal was originated by corporate finance adviser Banca Euromobiliare.

Debt
Italian banks Centrobanca and Meliorbanca each provided €6m in loans to support the transaction.

Previous funding
Quadrivio invested in ARBO for a 70% stake in 2007. It planned to strengthen the company's management structure and expand its number of retail outlets through acquisitions, and claims that it has now achieved all of its goals, having achieved an average annual growth rate in revenues of 18% over the past four years.

Company
Based in Fano, in the province of Pesaro and Urbino, ARBO is active in the distribution of spare parts and accessories for industrial plant components and equipment, boilers and burners, and air conditioners. It was founded in 1968 and employs more than 90 people.

The company's turnover doubled from €16m in 2007 to €33m today, while its operating margin increased significantly to 13% thanks to a 2011 EBITDA of €4.3m.

People
Director Marco Pellegrino led the deal for Ersel and joins the company's board, while chairman Alessandro Binello represented Quadrivio. Giordano Ghedini is the CEO of ARBO, founded by Leone Bonazzoli and Anita Lanci.

Advisers
Equity – Banca Euromobiliare, Simone Citterio (Corporate finance); Russo De Rosa Bolletta e Associati (Legal).
Vendor – Dewey & LeBoeuf (Legal).

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• Topics
• Southern Europe
• Buyouts
• Industrials
• Quadrivio
• Italy
• Secondary buyout