Thursday, October 10, 2013

Synergo exits CastFutura to Star Capital

Synergo SGR has exited CastFutura to Star Capital SGR, which valued the company at €25 million included its debt. The operation was revealed by MF - Milano Finanza. The operation ended at 4 times the consolidated EBITDA of 2012, equal to €6.7 million (from 6.2 in 2011) against a turnover of €51.5 million (from 55.2 million in 2011) and a net financial debt of €15.7 million (from 24.2).

CastFutura , which produces components for the domestic gas cooker and heating sector, is in the Synergo portfolio (with 73.94% of the capital), since the company  followed the funds of BS Private Equity sgr, which in turn had invested in 2005 in the company group. The divesture, started more than a year ago, saw at the beginning tighten negotiations with the German EGO group - an international high-tech company and one of the leading global manufacturers of domestic appliance technology, components and products - but at the end it went awry.

CastFutura was acquired by
 BS Private Equity back in 2005 when BS acquired approximately two thirds of the company, whole the management retained a significant minority shareholding. Vendors were a number of private individuals and entrepreneurs which came together as Cast and futura, originally two separate companies, merged some year before. The deal structure was innovative in that BS Private Equity did not use a newco to acquire the business. Instead, it invested directly in one of the companies, which the acquired the other one. The leveraged finance team od MPS Banca Impresa, the merchant-banking arm of Montepaschi di Siena, arranged the debt facilities, required to finance the transaction, by structuring the deal with an A- and B-trance comprising a €17m seven-year amortizing loan and a €8m eight-year bullet loan.

The acquisition of CastFutura from Star Capital SGR solved the problems that Synergo SGR could have entered, being that the deadline for the debt reimbursement amounting to €8 million in favor of MPS and Centrobanca, for which the banks had already waived their right to assert their rights when in 2012 were not met the company's financial targets.

The two banks, against the handover of control of the company, have refinanced the debt. According to MF-Milano FinanzaStar Capital has invested about €8 million of which €3 million of equity in capital increase, with the old shareholder Vincent Ferloni (12.79%) who has signed for its share and other shareholders who instead diluted. So at the end of the operation to Star Capital will held 80 to 85% in the company . Synergo was supported by the DVR Capital of Crloa Daveri. 

The operation was supported by law firm Russo de Rosa Associati and tax advisor Accini Cartolano & associati which advised Star Capital in the acquisition of the majority stake by taking care, respectively, of the structuring/tax due diligence and of the two diligences, legal and contractual. Synergo SGR was assisted by law firm Pavesi Gitti Verzoni afor the legal aspects and by Bestetti for tax aspects. The operation was financed by MPS Capital Services, acting as bank agent, and UBI Banca assisted by Simmons & Simmons for

on CastFutura: CastFutura is a manufacturer of components for appliances and heating equipment. The businesses operate somewhat differently: Cast manufactures all components in its factory in Bergamo, while Futura mainly sources the components from supplierts and assembles the products on its site in nearby Varese. While production sites are located in Egypt and Bulgaria, manufacture components are either assembled by CastFutura in Italy or sold directly to clients.