DouglasItalia/Douglas Chero (Italy) - Nov 2007

unquote
01 November 2007

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Shortly after closing its second fund (page 06), mid-market firm Consilium has closed a double acquisition by taking 75% of Douglas Chero and Douglas Italia from its founding family. One of the original shareholders is re-investing in return for a 25% stake. Leverage for the deal, described as “not aggressive”, was provided by Interbanca (lead arranger) and Centrobanca, on a 1:1 basis. With business founder Luigi Baldini’s unexpected passing, the company entered a period of administration by a ‘caretaker management’ team. When the Baldini’s death was officially confirmed and his sons could inherit the business, it is understood there were disagreements over the company’s future, which eventually prompted the decision to sell. Consilium’s managers were informed of the opportunity by an intermediary and closed the deal it in six months.

Company

Douglas Italia was founded in 1970 in Carpaneto Piacentino. It manufactures filters, steam traps and manifolds, as well as other products for special applications for the power industries. Douglas Chero was established in 1974 as a spin-off conceived to meet the demand for high quality forged valves for petroleum refining and production plants, offshore oil and gas fields, fertilizer and desalination plants. The two companies employ a workforce of around 110 people and will report a joint turnover of around EUR 32m. Around 70% of the turnover is generated abroad, via business in other parts of Europe, Middle and Far East. After a slowdown caused by the provisional management period, Consilum’s priority will be to put the business back on track by improving operations and the overall structure of the businesses, which may be merged in future. It was an attractive investment as the demand for its products from the refining and power industry grows steadily, providing a solid production pipeline for the coming years.

People

Stefano Iamoni and Antonio Glorioso of Consilium managed the transaction.

Advisers

Equity - Deloitte, Ruggero Respigo (Accounting)Equity - Deloitte, Ruggero Respigo (Legal)Equity - Parsec Finance, Mauro Vacchini (Other Consulting)Equity - Studio Legale Alpeggiani, Giorgio Alpeggiani (Legal)

Sourced from: Southern Europe unquote" 70 (Jan 2008)