Highlights

2019 was characterised by a relative slowdown in the aggregate value of deals completed over the period. This trend was seen across most European markets and was testament to the negative impact of the current uncertainty in the international trade and geopolitical environment.

Looking back, here’s what we saw across the Italian mid-market during 2019:

  • Deal flow has remained healthy, despite a general lack of megadeals across the region. This reduction in average deal size represents the more conservative approach adopted by both corporates and financial sponsors in their capital investment decision. However, Italian companies still remain both appealing for investors and highly interested in pursuing inorganic growth opportunities
  • Private equity firms have been active in Italy over 2019 – KPMG [1] reports a total value of PE-backed deals of approximately €10bn with 161 completed transactions, representing an approximate 25% increase in deal volumes vs 2018

Below is a summary of our 2020 outlook:

  • Despite a difficult market environment, Italy has returned to positive, albeit small, economic growth and the formation of a coalition government was perceived as an improvement towards both internal political stability and international relations in Europe
  • PE firms remain rich in dry powder, cost of debt remains low and the Italian buyout market still provides interesting investment opportunities at attractive valuation multiples
  • There is a larger number of high-quality, mid-sized and entrepreneurial companies which have room for operational improvements and/or are in need of fresh capital for expansion – particularly in Consumer, Industrials and Healthcare; and MedTech companies are also expected to come into the spotlight
  • Trend of Asian investors being attracted to strategically valuable Italian assets, such as specific technologies that enable Asian firms to enhance product differentiation or gain access to the Italian and European markets, is expected to continue

Key deals that took place include:

Consumer, Leisure & Retail:

  • Platinum Equity has agreed to acquire Farnese Vini, the Italian wine group, from NB Renaissance, for a consideration of €175m
  • Xenon Private Equity has agreed to acquire A&A Pelli Pregiate, the Italian leather specialists, and its subsidiaries Just Gators and Quake Ricami, for an undisclosed consideration

Healthcare:

  • Aksia Group along with Equita has agreed to acquire Primo Group, an Italian owner and operator of dental clinics, from ArchiMed, for an undisclosed consideration

Industrial Products & Services:

  • Xenon Private Equity has agreed to acquire CBG Acciai, an Italian steel blades manufacturer, for a minimum consideration of €70m
  • Platinum Equity has agreed to acquire De Wave, an Italian marine contractor, from Xenon Private Equity, for an undisclosed consideration
  • Sun European Partners has agreed to acquire Veterie Riunite, an Italian glass producer, from Style Capital and Opera SGR, for an undisclosed consideration

Services:

  • NB Aurora has agreed to acquire a 70% stake in Phse Srl, the Italy-based pharma logistics specialist, for an undisclosed consideration

TMT:

  • Xenon Private Equity has agreed to acquire a 60% stake in Impresoft, an Italy-based information and communications technology specialist, for a consideration of €45m. Xenon Private Equity was advised by DC Advisory, learn more about this deal >

Italy deals by sector

[1] L’M&A nel 2019 delude le attese: crescono i volumi, ma diminuiscono i controvalori, KPMG, 2019

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