Carlyle buys Marelli Motori

The US firm has paid €212m for the engine maker in the latest sign of a gradual return of deal activity in Italy.

The Carlyle Group has acquired Marelli Motori, an Italian motor producer, for €212 million. 

The company was previously owned by Melrose Industries, a London-listed investment group.  Still subject to regulatory clearance, the sale is expected to close in August 2013. 

Established in 1891, Marelli Motori supplies generators and electric motors to the power generation, marine, energy and manufacturing sectors. It has production plants in Italy and Malaysia, and sells primarily to the European, American and South African markets. Its sales totaled €141.9 million in 2012, a 12.5 percent increase on 2011, and netted €22.2 million in profits last year. 

Lately we’ve also seen an increase in attention by pan-European and UK funds towards Italian targets

Claudio Cerabolini

The buyout comes amid signs of a revival of the Italian private equity market, which has seen a number of sizeable deals over the last six months. These have included CVC’s acquisition of Cerved, a €1.14 billion intelligence business, last January; Clessidra’s €150 million capital injection in tiremaker Pirelli; and Charterhouse’s €320 million buyout of Doc Generici, the firm’s first maiden investment in the country. 

The country has also seen a resurgence of activity on the exit front, with Cinven completing a €3.3 billion partial sale of aerospace group Avio, Aksia reaping a 3x on its exit from medical packaging business Plastiape, and AXA Private Equity disposing of hydraulic valve producer Duplomatic.   

While the largest deals happened at the end of 2012 or early in 2013, the Italian market has continued to see a pick-up in interest for smaller deals, Claudio Cerabolini, a partner at Clifford Chance’s Milan office, told Private Equity International. “Domestic houses continue to dominate the mid-market segment. Lately we’ve also seen an increase in attention by pan-European and UK funds towards Italian targets.”

In the current market, some people see Italy as a market full of opportunities

Jonathan Blake

This thaw was tangible across a variety of sectors, concurred Marco de Benedetti, managing director at Carlyle. The fashion and design worlds, on one side, but also the mechanical, engineering and manufacturing industries on the other, were areas where Italian entrepreneurs had enough know-how and capabilities to be successful in export markets. 

This gradual recovery found its roots in the calmer macroeconomic and political climate, insiders commented. “A year ago, we were talking about Italy crashing out of the euro. And now we’re not talking about this anymore. It’s a very big deal for Italy to come back from a brink like that,” said Jonathan Blake, a partner at SJ Berwin. 

He admitted the market remained a difficult one to operate in: a number of firms have indeed closed their Italian offices over the past six months, including Apax Partners and Advent International, and others have scaled down their operations. 

But there are a number of new Italian funds being raised, Blake said. And there is some potential for firms to close them successfully: Investindustrial reached hard-cap for its largest-ever vehicle – primarily focused on Italy and Spain – on €1.25 billion last April. “One person’s problem is another person’s opportunity, and in the current market, some people see Italy as a market full of opportunities.”

The Marelli Motori deal will be funded by Carlyle’s Europe Partners III, a 2006-vintage that closed on €5.35 billion in 2006. The firm is in the market to raise its successor vehicle, which is aiming to collect €3 billion.