First-ever Italian SPAC goes to market

A number of European heavyweights will seek up to €150 million in their efforts to expand one attractive mid-market business in Italy.

The founders of European alternatives firm BLM Partners have kick started their fundraising drive with the creation of Italy1, a special purpose acquisition company (or SPAC).

SPAC’s are publicly-traded buyout companies which call for a shareholder vote on an acquisition, unlike their private equity fund cousins, which typically leave decisions entirely to fund managers.

Italy1 is the first of its kind in Italy and among “less than a handful” of SPACs rooted in Europe, said a source with knowledge of the matter. 

The SPAC, which will be listed on the Italian stock exchange, will seek up to €150 million through the offering. Once the funds are raised, the shell company will take a stake in one Italy-focused business worth somewhere between €300 million and €1 billion in equity value.

The target business will also have an experienced management team, strong cash flow generation, a proven track record in the market and a diversified customer base. Once a suitable target is identified, the Italy1 partners will work alongside management to “deliver operational and strategic support” in taking the company public, according to Italy1’s website.  Trading of Italy1’s shares is expected to start by the end of this month.

Italy1’s board argued the current economic climate in Italy is ripe for buyers as markets have yet to undergo a full recovery.

BLM was founded in 2008 by Florian Lahnstein, the former European head of Bear Stearns; Thomas Middelhoff, Investcorp’s former European head; and Roland Berger, founder of Roland Berger Strategy Consultants.

Prior to the SPAC’s launch the trio recruited Vito Gambarale, whose career includes stints at Telecom Italia, where he was general manager, and toll road operator Autostrade, where he was chief executive officer; and Carlo Mammola, managing partner at European private equity firm Argan Capital. Both men will sit on Italy1’s board of directors.

The firm’s first SPAC, Germany1, raised €250 million and acquired German mid-market company AEG Power Solutions in 2008.

Read more about development's in Italy's private equity market in February's edition of Private Equity International.