Faster S.p.A. (Italy) - Oct 2007

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01 October 2007

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Argan Capital has agreed to buy quick-release coupling manufacturer Faster from STAR Social Responsible fund, which is in turn managed by Efibanca Palladio Finanziaria. Unicredit underwrote a €95m senior debt package comprising one amortising and two bullet tranches. On completion of the deal, forecast for December, the shareholding structure will see Argan controlling circa 82% stake, while the remainder will be split by the company’s managers and another minority shareholder. Former CEO Massimo Arosio will take up the role of chairman and will assist in the transition process to the new backers in the medium term. Corporate finance boutique EnVent advised on the deal, which was described as a lengthy process involving a fair amount of negotiation. The non-binding offer was made in early June and the deal was signed in October, after “turbulent” summer months. It is understood that the competition process involved other three to four parties and reportedly included some private equity firms. Argan Capital was interested in the company due to its bespoke technological capabilities and market positioning. The buyout house intends to boost these strong points with its international contacts and know-how in the industrial arena, as well as financial support. The business plan will stress the internationalisation of the business, via the support of sales efforts in India and China, as well as reinforcing the brand awareness in Europe and US. The new backers will also look into strengthening the maintenance sales team.

Company

Faster is based in Rivolta d’Adda, a metropolitan area of Cremona. The company, founded in 1951, has subsidiaries in the US, India and Brazil and sales offices in China, Germany, France and the UK. It employs around 220 staff in the research, design, production and sale of quick-release couplings and multi-connectors for hydraulics and fluids. The main applications of these products are currently related to the agricultural and construction equipment machinery sectors. Quickrelease couplings are attached to equipment machinery such as tractors, combine-harvesters, sprayers, fork-lifters, diggers, toe loaders and cranes in order to enhance their efficiency. Faster reported a turnover of €60m in 2007 – more than 70% of which originated from outside Italy – with an EBITDA of €16.5m.

People

The acquisition was led by Carlo Mammola, Pasquale Pinto and Giovanni Revoltella of Argan Capital. Efibanca Palladio Finanziaria’s team was led by Marco Gazzaniga and Carlo Arteria.

Advisers

Equity - Alix Partners, (Commercial Due Diligence)Equity - EnVent, (Corporate Finance)Equity - ERM, (Environmental Due Diligence)Equity - Marsh, (Insurance Due Diligence)Equity - PricewaterhouseCoopers, (Financial Due Diligence)Equity - Studio Agnoli Bernardi, (Legal)Equity - Studio Pirola, (Tax)Vendor - Clifford Chance LLP, (Legal)Vendor - Eidos Partners, (Financial Due Diligence)Vendor - Grimaldi & Associati, (Legal)Vendor - Studio Russo De Rosa Bolletta & Associati, (Tax)