Paris-headquartered AXA Private Equity has sold its majority stake in Duplomatic Oleodinamica, an Italian producer of hydraulic valves and pumps, to Milanese private equity firm Progressio, according to a statement. It was the result of an auction process run by UBS.
Financial details of the transaction were undisclosed, but Paolo Bergonzini, managing director and head of AXA Private Equity’s Italian small market enterprise capital team, told Private Equity International the divestment “was a very good deal for us”.
AXA PE and Progressio declined to comment on the deal’s value. A Progressio spokesperson said the leverage it used in the acquisition was 2x EBITDA. Last year, the company generated a turnover of approximately €46 million, with an EBITDA of approximately €6.8 million.
During its five year ownership, AXA PE helped to internationalise the business and divested some of the company’s non-core assets, Bergonzini said. In 2011, the company expanded through the acquisition of Continental Hydraulics, a US-based company. AXA PE also strengthened the team in Italy and the US and moved the company to a new plant in the Milan region, he added.
We have had a very nice integration both in terms of geographies and of product range. Duplomatic was a small Italian company, but is now operating globally.
“We have had a very nice integration both in terms of geographies and of product range. Duplomatic was a small Italian company, but is now operating globally. Duplomatic Group is only depending on Italy for 25 percent of its sales. The main market is now the US and the second one is China,” he said.
AXA PE acquired 88 percent of the business in January 2008, using its AXA Expansion II, a €353 million, 2006-vintage. That fund is fully deployed, with some additional capital left for add-on acquisitions. Led by the small market enterprise capital team, it focuses on companies with values below €100 million in the case of buying a controlling stake or below €500 million for non-controlling investments.
The firm is currently raising a successor fund, AXA Expansion III, which has a €400 million target. The fund is expected to hold a third close in the next few months. Last August, AXA PE invested in German company frostkrone using capital from AXA Expansion II and AXA Expansion III.
AXA PE declined to comment on fundraising.
Progressio, a Milan-based private equity firm, acquired the majority stake in Duplomatic Oleodinamica using its €206m Fund Progressio Investimenti II, a 2011-vintage fund. Following the acquisition, the fund was 40 percent deployed, a Progessio spokesperson said in an email.
In a statement, Progessio’s chief executive and senior partner said the firm plans to “continue the process of diversification, with the aim of strengthen its position in Northern Europe, China and the US and also increase its product portfolio and services”.
Progessio manages €306 million through two funds: Progressio Investimenti, a €100 million, 2005 vintage and its current Progressio Investimenti II. The firm invests in small and medium sized companies with revenues between €20 million and €200 million. It typically backs companies with high potential growth in the industrial and service sectors and targets majority and minority stakes.