European Doughty Scores Maiden Italian Deal –

Doughty Hanson & Co., which during 1999 expanded its focus beyond Northern Europe and into North America, rounded off the year with the announcement of its first Italian acquisition.

The firm, which now lays claim to the title of Europe’s largest independent private equity house, is to pay some e428 million for Fiat Lubricants Group (FL Group), one of Europe’s largest producers and distributors of automotive and industrial lubricants. Fiat Lubricants was put up by sale by Magneti Marelli, a listed company majority owned by Fiat. The Fiat Lubricants transaction-although just more than a quarter the size of 1997’s e1.67 billion OTTO/SEAT deal-nevertheless ranks among Italy’s largest buyouts. Fuji Bank, London, is arranging debt to support the acquisition.

In addition to its core automotive and industrial lubricant activities, Turin-based Fiat Lubricants distributes and blends anti-freeze products. Its brands include Selenia, VS, HPX, Ambra, Paraflu, Urania, and Tutela. Doughty Hanson said that the highly profitable, cash-generative company forecast sales of more than euros 350 million for 1999.

Fiat Lubricants has strong market positions both in Europe, where it is the second-largest independent operator in its sector, and Latin America, where it heads Fiat Lubricant’s managers will remain with the company. General Manager Enrica Chiantelassa said the association with the buyout house will provide a platform on which the company will continue the development and expansion of the business.

Commenting on the deal, Doughty Hanson’s Nigel Doughty said: “I am pleased that our first transaction in Italy demonstrates our ability to work with the largest corporates to devise and structure a transaction that meets the needs of all parties.” Doughty Hanson opened an Italian office in Milan in early 1998.