BC Partners takes joint control of Italy’s Fedrigoni in $3 billion deal

The Bain Capital logo is displayed on a screen during a news conference in Tokyo, Japan October 5, 2017. REUTERS/Kim Kyung-Hoon

MILAN, July 26 (Reuters) – Bain Capital has reached an agreement to give rival buyout fund BC Partners co-ownership of Italy’s Fedrigoni in a deal valuing the papermaker at 3 billion euros (3 billion), the companies announced on Tuesday.

Bain acquired Fedrigoni in 2017 and has since grown the maker of self-adhesive labels and fiber-based packaging products with a series of domestic and international acquisitions, doubling its adjusted sales and nearly tripling its adjusted core earnings. .

Under Bain ownership, Fedrigoni has diversified its portfolio and expanded its international presence, working with its customers to ease their transition from plastic to paper while investing in research into sustainable materials as part of its environmental, social and corporate governance (ESG).

New sustainability rules proposed by the European Union require packaging to be reusable or recyclable by 2030, forcing companies to ditch plastics.

“Fedrigoni is a truly ESG-focused company,” said Ivano Sessa, Co-Head of Industries at Bain and President of Fedrigoni Holding. “He could be a potential candidate for an initial public offering (IPO) in the next few years as investors seek to gain greater ESG exposure.”

BC Partners is also focused on sustainable growth in packaging, having last year purchased Bologna-based IMA Group, the world leader in the production of automatic packaging machinery.

The Fedrigoni family will remain invested in the company, as will the entire management team.

Bain Capital and Fedrigoni were advised by Rothschild and Morgan Stanley, while Nomura and Canson Capital Partners acted as lead financial advisors to BC Partners, together with JPMorgan.

Canson will also co-invest in the transaction through its investment banking arm.

The deal, which is expected to close by the end of 2022, ranks as one of Italy’s biggest private equity investments this year and challenges a tough funding market for buyout funds.

“Fedrigoni has re-opened the leveraged finance underwriting market in Europe due to its growth, ability to generate cash and ESG commitment,” said Sessa de Bain.

A pool of seven banks, including Nomura, Goldman Sachs and Morgan Stanley, agreed to underwrite a bond to fund BC Partners’ investment.

($1 = 0.9794 euros)

Reporting by Valentina Za and Pamela Barbaglia; Editing by Kirsten Donovan, Keith Weir and Jan Harvey

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