PAI Partners, the French private equity firm formerly known as Paribas Affaires Industrielles, has agreed terms on the acquisition of a majority stake in Saeco International, the Italian coffee machine manufacturer based in Bologna.
PAI, investing from its E1.8bn PAI Europe III fund, will pay E3.80 per share to the company’s majority shareholders, a four per cent premium to the closing price on Friday of E3.67, in return for a 66.85 per cent holding worth a total of E508m.
After acquiring the majority stake, PAI will be required to submit an offer for the remaining shares under Italian law as a precursor to delisting the company from the Italian stock exchange. PAI said it will offer E3.59 per share for the remaining 33.15 per cent stake. The remaining stake is valued at E238m giving Saeco a total value of E746m.
The transaction is expected to close in the first quarter of 2004.
Saeco International Group dates back to 1976 when Sergio Zappella established GSL, a company producing espresso coffee machines for home use. In the first nine months of 2003, Saeco reported revenues of E285m, an increase of three per cent compared to the same period in 2002. EBITDA was up eleven per cent at E65m. Operating profit stood at E39m.
Saeco chairman Sergio Zappella will sell his 30.4 per cent holding and will reinvest in the take private of the business. He will also continue as chairman of the group. Debt financing for the acquisition is being provided by JP Morgan.
The Saeco offer is the second public to private transaction commenced by PAI in 2003. In July, the firm launched a E500m offer for French optical retailer Grandvision, which was listed on the Paris bourse. The E21 per share offer lapsed after Dutch investment firm HAL Holding bought up shares in the company, resulting in the offer only being accepted by 12 per cent of Grandvision’s shareholders.
PAI is being advised by Mediobanca, while Saeco’s majority shareholders have been advised by Rothschild.