Italian plastics company, Negri Bossi will float on Italy’s Star market next week, providing a partial exit for its shareholders, an investor group headed by Milan-based Private Equity Partners (PEP).
The IPO comprises the issuance of 11.2 million ordinary shares, fixed at a maximum price of EURO3.4 per share.
Founded in 1947, Lombard-based Negri Bossi manufactures machines for the injection moulding of plastics. In 1999, the company was acquired in a management buyout from the Norwegian shipping group, Kvaerner, which was then first in financial difficulties. An investor group headed by Milan-based private equity firm, Private Equity Partners acquired a 70 per cent share in the company through its holding company Ridgeway Investments. Chase Mittel Capital Fund also participated in the round. Total value of the transaction was Lira90 billion, with Lira40 billion in cash and Lira50 billion in assumed liabilities and assets.
PEP will sell part of its shares in the company, but will retain a 34 per cent share in the business along with other investors.
The Italian Star market (Segmento Titoli con Alti Requisiti) is the newly-created segment of the electronic equity market (Mercato Telematico Azionario-MTA) and is managed by Borsa Italiana. It is for small and medium capitalisation companies operating in traditional sectors of the economy and meeting stricter and more specific requirements with respect to transparency, liquidity and corporate governance.
Fabio Sattin, one of the founding partners of PEP, is extremely pleased with the progress of Negri Bossi and the fact that it has increased profitability since its management buyout in 1999, with consolidated net sales up from Lira159.4 billion to Lira186.1 billion in 2000.
He said: “We decided along with management six months ago that the best way to raise future funds was to float the company. This is a great success for management and for us as a VC firm. IPOs are fundamental for the VC industry without them everything stops.” He added that the successful flotation of Negri Bossi was an example of what VCs in Europe can achieve if working with the right management team.
Private Equity Partners is in the process of investing its second fund and there are plans in the pipeline for a third offering in 2002.