Gruppo Argenta (Italy) - Dec 2007

unquote
01 December 2007

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Cognetas and Investitori Associati have acquired a majority stake in vending business Gruppo Argenta from Advent International. The remainder will be retained by the management team who will re-invest a significant portion of their profits from the sale. The tertiary buyout was completed in a swift six-week period given the tight time frame laid down by the vendor during the auction process.

Exit deal

Advent International sold its stake in Gruppo Argenta after backing the company in 2005. As part of the exit deal, minority shareholder PM & Partners will also dispose of its stake in the business.

Deal history

In 2005, Advent and PM & Partners invested in Gruppo Argenta acquiring a majority stake from Quadrivio and San Paolo IMI Private Equity with the remaining stake being retained by the management team. At the time, Advent agreed to maintain the original leverage structure provided by Banca Nazionale del Lavoro. It was reported that the exit generated an IRR of approximately 65% for both private equity houses. The previous funding by Quadrivio and San Paolo IMI Private Equity includes a €22m investment for a 33% and 27% stake respectively. The remaining stake was held by the management team. Banca Nazionale del Lavoro provided €58.5m of senior debt financing to support the transaction, including €24m to finance earnouts.

Company

Modena-based Argenta was founded in 1968 by Epaminonda Scaltriti. The company operates 120,000 vending machines that supply hot and cold drinks and snacks through 65,000 businesses in Italy. The firm has 1,150 employees and reported a turnover in 2007 of approximately €150m, with an EBITDA margin believed to be around 25%. The investors plan to pursue the expansion plan through more bolt-on acquisitions, but these will take place for the most part in the Italian market. Under Advent’s ownership the company succeeded in implementing a buy-and-build strategy integrating 11 acquisitions. These doubled the company’s sales, improving its position in the European market. Although it is still too early to foresee an exact exit strategy, the financial backers have alluded to the possibility of an IPO down the line.

People

Maurizio Bianco led the deal for Cognetas.

Advisers

Equity - Giliberti Pappalettera Triscornia & Associati, Carlo Pappalettera (Legal)Equity - Houlihan Lokey Howard & Zukin, Romain Lanier, Will Allen (Corporate Finance)Equity - Lazard & Co, Michele Marocchino (Corporate Finance)

Sourced from: Southern Europe unquote" 71 (Feb 2008)