Sator- and Principia-backed Banzai in first Italian IPO of 2015

The IPO raised €54m, but failed to generate enough interest to trigger a sell-down by the company's private equity backers. The offering comprised 8 million new shares and 8 million existing shares priced at €6.75 apiece, the bottom of the initial €6.75–8.50 range.

The 8 million new shares were given precedence, with a €50m fundraising hurdle agreed to by Sator and Principia prior to the sale of their existing shares. Due to insufficient investor demand, the vendors decided not to proceed with the sale of the 8 million existing shares despite clearing the hurdle.

Banzai announced its intention to float on the Italian stock exchange in early February, with Jefferies International and Banca Profilo acting as joint global bookrunners in the process.

At the time of the flotation's announcement, it was stated Sator would retain a 12.9% stake in the company should the offering be fully subscribed.

The offering is the first IPO of the year in Italy, and will be followed by that of BC Partners' portfolio company OVS Industry in the coming weeks. With two flotations due to take place within the first few months of the year, there are signs the Italian public markets are picking up. According to unquote" data, just one additional private equity-backed IPO before the end of the year would see 2015 reach a new record since the global financial crisis struck in 2007.

Eye on the prize
Alessandro Damiano, head of investments at Principia, says the choice of exit route is coherent with the firm's investment programme. Sator invested around €25m in Banzai in 2013, acquiring a 28% stake in order to accelerate the growth of the business and allow it to prepare for the IPO. "We always intended to undertake a buy-and-build process and build a market leader in Italian e-commerce. As a result, the only exit route in our opinion was through a flotation. We did not consider that an international trade sale was an option," Damiano continues.

Principia – then known as Quantica – first invested in two subsidiaries of Banzai in 2009; one specialised in e-commerce and the other focusing on media and communications. The original deal, Damiano says, took "no longer than a couple of months" from first contact to completion. "The process was not a competitive one," he explains. "We had identified the company's founder, Paolo Ainio, as a successful manager and entrepreneur many years ago. He co-founded internet platform Virgilio, which was then bought by the Seat Pagine Gialle group, so we already knew him well."

Following the firm's investment, the business merged these subsidiaries, resulting in Principia becoming a shareholder in the larger business. The original capital was intended to develop the company's digital platforms and invest in marketing. Since the GP's first involvement, however, Banzai has made a series of bolt-ons.

In 2009 it acquired e-commerce site Born4Shop.it, which was later incorporated into the group's SaldiPrivati brand. Two years later, it bought media brands Giornalettismo and Il Post, which it merged with its online media and news platform Liquida. The business's final acquisition before the announcement of its IPO was that of e-commerce group Terasiti, with brands including Mr Price, ePlaza and Bow.

In addition to its buy-and-build strategy, Banzai launched online women's fashion publication Pianeta Donna in 2010 and video advertising billboard business Gold 5 in 2014. In the same year, the group also rolled-out a network of public lockers allowing customers of its e-commerce brands to collect parcels locally.

The result of this strategy is a group that posts a turnover of around €150m, 90% of which is generated by e-commerce.

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• Topics
• Exits
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• Southern Europe
• Principia
• Italy
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