Vestar-led group agree €375m Italian glass deal

A private equity consortium co-led by Vestar Capital Europe and Ergon Capital Partners has signed an agreement to acquire Italian glass insulator manufacturer Seves Group.

The European arm of New York-based Vestar Capital, Belgian private equity firm Ergon Capital Partners and Luxembourg investment fund Athena Private Equity are to acquire Seves Group in a €375 million ($452 million) transaction, expected to close in the second quarter of 2006.
 
The consortium will acquire Seves from shareholders 3i, Athena, Fidia, Intek and Interbanca. Athena will remain a shareholder by rolling over some of its equity into the new company, while management will maintain a small stake, according to Robert Rosner, Paris-based president of Vestar Capital Europe. Vestar and Ergon will have a joint majority stake.
 

The management team had reached a point where it felt it was time to take out its original, primarily Italian-based, small investors, give them a nice return and take the company to the next stage.

Robert Rosner, president, Vestar Capital Europe

Debt for the transaction will be provided by BNP Paribas, Banca Intesa and ING. Rosner added that the banks provided senior debt but no mezzanine financing or high yield bonds. “We mutually decided that we wanted to capitalise the company for growth, we didn’t want to stretch the debt,” he said. “So we have about a third of the purchase price coming in capital from funds.”
 
Headquartered in Florence, Seves provides glass insulators for high and medium power transmission and distribution systems as well as glass blocks for architectural and interior design applications. The company employs approximately 2,000 people and operates ten productions facilities in Italy, Germany, the Czech Republic, Brazil and China, where it currently holds a market-leading position.
 
Rosner said the deal was not brought to market through an auction but was privately negotiated. “The management team had reached a point where it felt it was time to take out its original, primarily Italian-based, small investors, give them a nice return and take the company to the next stage, especially in terms of making acquisitions and building on their position in China,” he said.
 
The investment will be the third from Vestar V, which held a $3.7 billion (€3 billion) final close in January of this year. In December, Vestar Capital Europe acquired Swiss wood flooring company Nybron Flooring International from Nordic Capital and HIAG for around €300 million. Last month, Vestar Capital’s US arm bought healthcare provider National Mentor from Madison Dearborn Partners for an undisclosed sum.
 
Founded in March 2005, Brussels-headquartered Ergon Capital Partners is a mid-market private equity firm backed by Groupe Bruxelles Lambert and Parcom Ventures/ING. The firm, which also has an office in Milan, focuses on investments in Belgium, Italy and Southern European countries.