Italian players predict stability of the private equity market for the next six months and a recovery of the market before year-end, according to the Italy Private Equity Confidence Survey carried out by Deloitte and Touche.
While Italian funds raised and invested were both down in 2001, recording the first slow-down in the Italian market for over a decade, players are optimistic about 2002 following the completion of two significant Italian deals in the first half – the EURO1 billion buyout of Galbani from Groupe Danone and Apax’s EURO418.5 million acquisition of Azimut.
Debt-burdened automotive group Fiat could also be the source of deal opportunities in the coming months with the sale of its Comau tooling business, Teksid, its specialist foundry operations, and parts of Magneti Marelli, its captive components supplier, in a EURO3 billion disposal drive. The group is also rumoured to be in talks to sell 35 per cent of its Ferrari unit.
There is overall optimism in the Italian market, according to the survey with half of the respondents predicting the total value of their portfolio will remain stable for the next six months and the other half foreseeing an increase. None of those surveyed predicted a decrease in valuations. There was little hope among respondents of a recovery in the IPO market, with the majority of exit opportunities forecast as trade sales. Deal opportunity is likely to be in the manufacturing, leisure, food and drink and software sectors.
Roberto del Giudice of AIFI believes the optimism of Italian players is justified by the vast number of business proposals analysed in the past months, which have been deemed suitable for investment in the second half of the year. “The [market] crisis created a stand-by period, even for good investment opportunities which needed a greater clarity for the future. In this respect, the market is already showing positive signs in terms of new deals done.”
Del Giudice cites spin-offs and large industrial groups such as Fiat, which are restructuring their activities, as major sources of deal flow. “The market is extremely liquid, guaranteeing strong availability of capital from private equity players,” he says.