A Paris-based private equity firm, PAI Partners, has reached an agreement with Marcolin's main shareholders to take over the company and try to delist it. PAI has agreed to buy 78.39 percent of Marcolin's capital from the Marcolin family; the Della Valle brothers, Diego and Andrea; and the businessman Antonio Abete.
The shares are being bought at €4.25 each for a total outlay of €207.03 million.
The transaction is being carried out by Cristallo, a company controlled by PAI. When the deal is completed, presumably in November, Giovanni, Cirillo and Maurizio Marcolin as well as the two Della Valle brothers and Abete will buy back a combined 15 percent stake in Cristallo. The shareholders reinvesting in Marcolin will be locked in the investment for at least three years.
PAI said that Marcolin has excellent growth prospects in Europe, the U.S. and especially in emerging markets. The private equity fund said it will support Marcolin's international expansion and invest in further long-term contracts with major designer brands. It added that the continued partnership with the Marcolins, the Della Valles and Abete will be very important to support the company's growth.
Maurizio Marcolin is currently in charge of licensing and relations with brands, and PAI described his ongoing involvement as “particularly important.” The private equity fund also said it is “very pleased” to confirm Giovanni Zoppas as managing director.
After the acquisition of the 78.39 percent stake, Cristallo will launch a mandatory bid to buy out minority shareholders at €4.25 a share. If all shares are tendered, the overall cost of purchasing the whole of Marcolin will be about €264.0 million.
Before the announcement of the deal, Marcolin was trading at around €4.80 on the Milan stock exchange, representing a market capitalization of nearly €300 million as investors speculated that PAI would pay more for Marcolin. Prior to the announcement, the Marcolin and Della Valle families had said they were in advanced talks to sell their stakes to PAI.
PAI was advised by Italy's two main banks, Unicredit and Intesa Sanpaolo, and the influential investment bank Mediobanca to carry out the deal. The fund is expected to obtain financing equal to up to four times Marcolin's gross operating profits (Ebitda). Under this sort of leveraged deal, the acquiring company finances the takeover with debt that is repaid from the cash flow generated by the target company.
In 2011, Marcolin had Ebitda of €34.2 million on sales of €224.1 million. The group's profitability is expected to drop slightly this year due to the economic slowdown with Ebitda seen reaching €30-32 million.
PAI has already taken over listed companies in Italy. In 2003, it bought Saeco, a producer of espresso machines and electrical appliances, and in 2005 a big chain of variety stores, Coin. It also invested in the Nuance group, the world's third-largest airport duty-free retailer.