New York-listed Ferro Corporation, a leading global supplier of technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials, signed an agreement to acquire Vetriceramici spa, an Italian producer and distributor of all semi-finished products needed to enhance the appearance of glazed porcelain stoneware. The deal has been announced by Ferro Corp last Sunday September 21st and is expected to be closed by next December 1st (download here the press release),
Founded in 1987, the company based in Faenza and Sassuolo (in the Northern Italy region of Emilia Romagna) doubled its revenues since 2006 when Italian mid-market private equity operator Star Capital bought a 70 pct stake from the two founders Gianfranco Padovani e Sergio Zannoni, who still own a 15 pct stake each.
Vetriceramici actually reached 45 million euros of revenues in 2013 with a 21% of ebitda margin and 20 million euros of net financial debt. Ferro will acquire the Italian company on the bbase of an enterprise value of 83 million euros, Sector evaluation multiples are acutallu around 7-7.5x ebitda which is expected to be over 11 million euros at the end of 2014 (see here a previous post by BeBeez)
Vetriceramici had July 2014 trailing twelve month sales of approximately €53 million, and over the last three fiscal years achieved compounded annual sales growth of 9.3%. Based on estimated July 2014 trailing twelve month ebitda and expected synergies, Ferro says that the acquisition purchase price represents a transaction multiple of 4.9X and expects the transaction to be accretive to Ferro’s adjusted diluted earnings per share by $0.12 to $0.14 in 2015.
Vetriceramici produces fusion colored grains, technical grains, matte colored micro-grains, frits, double charge products, ceramic glazes, and inks for digital printing. The company operates manufacturing facilities in Italy andMexico, a mixing plant in Poland and research and development and sales offices in Italy and Turkey. The acquisition is then expected to improve Ferro’s growth opportunities by enhancing its product portfolio and improving its position in important growth markets, including the United States, Mexico, Turkey, and Eastern Europe.
Ferro was advised by Jones Day. William Blair&Company and K Finance acted as financial advisors to the sellers. Legal advisor to the sellers was Accinni, Cartolano e Associati.