Italian sovereign fund Fondo Strategico and its two “colleagues” from Qatar and Kuwait bet 165 miillion euros on Inalca spa, an Italian company 100% owned by Cremonini Group (download here the press release).
Inalca is a European leader in the meat-processing (with brands Inalca, Montana, Italia Alimentari, CorteBuona and Ibis) and in food distribution in the hotels, restaurants and catering sector outside Italy, mainly in Russia and several Western African countries. Food distribution includes a wide range of specialties (more than 2,000), comprising traditional Made in Italy food categories. Inalca reached 1.56 billion euros in revenues in 2013 with 125 millions of ebitda and will close year 2014 on the same levels.
«This deal will allow us to reachin 3 years the same targets that we would have reached in six or seven years, We have many projects in oure pipeline and thanks to FSI we can start working on them quite soon. Anyway it’s not the cash that we needed. What made us decide to ally with FSI are the business relationships that it can offer us starting from its links with other sovereign funds”, Cremonini Group’s ceo Vincenzo Cremonini told MF-Milano FInanza in an exclusive interview last Saturday after the deal was announced.
More in detail, the deal has been conducted by FSI through IQ Made in Italy Investment Company spa, the 50%-50% joint venture between FSI and Qatar Investment Authority (Qia), incorporated in March 2013 with a capital of 300 million euros, which can be increased up to 2 billions.This is the first deal signed by IQ Made in Italy, which targets companies operating in Made in Italy sectors, such as food and food distribution, fashion and luxury, design and furnitures, tourism and lyfestyle (see a previous post by Beez and the last press release).
So FSI, led by ceo Maurizio Tamagnini, will subscribe, through IQ Made in Italy, a 115 million euros capital increase in Inalca spa while Cremonini spa will sell IQ a number of Inalca shares for a total value of 50 million euros. Following the completion of the165 million euros investment, IQ Made in Italy will own about 28.4% of Inalca and Cremonini the remaining 71.6%.
Vincenzo Cremonini told MF-Milano Finanza that “thanks to the 115 million euros capital increase, Inalca will be able to reach the targets of its new strategic plan aimig at revenues of much more than 2 billion euros by year 2020. We already started consturction of pmeat production plants in POland and Russia and in Russia we are starting the construction of a new distribution platform for food products. The same we are doing in Kazkstan and Mozambico. Moreover, we are now in the position to think of possibile acquisitions”.
Financial advisor to the deal is Appeal Strategy&Finance, while leagel support to FSI and QIA is offered by Latham&Watkins and studio Toffoletto De Luca Tamajo e soci law firms. Cremonini group was advised by Sciumé & Associat law firm.
«We calculated that each euro invested by Inalca in the food distribution business is transformed in 2.5 euros of Italian exports per year. That is way Inalca is the biggest export platform for Made in Italy food export”, co-founder of Appeal Strategy&Finance advisory firm Isidoro Lucciola, told to MF-Milano Finanza (the other firm’s cofounder being former Unicredit’s ceo Alessandro Profumo).
The whole deal involves Kuwait Investment Authority (Kia) too. Actually FSI interest in IQ Made in Italy was contributed to FSI Investimenti spa last June. The latter is an investment company with 2.185 billion euros of assets and commitments which is 77% owned by FSI and 23% owned by KIA (download here the press release). The transaction included the contribution by FSI of its investment portfolio, excluding the interest in Assicurazioni Generali and the 40% interest in Ansaldo Energia already committed for sale to Shanghai Electric Corporation. Moreover FSI and KIA committed to a capital injection up to 500 millions each and KIA already paid in 352 millions.
The press release leaves room for other investors to join the deal. “The possibility of further collaboration between Cremonini family, FSI, QIA, Kuwait Investment Authority (via FSI Investimenti) and other international investors creates additional potential to strengthen Inalca’s foreign distribution”, the press release says. Interviewd by MF-Milano FInanza on that issue, Vincenzo Cremonini said that the Russian Direct Investment Fund (RDIF) is the most natural candidate for entering the deal as Cremonini Group has been working for more than 30 years in Russia and has huge interests there. Moreover FSI signed a co-investiment agreement one year ago up to one billion euros (download here the press release). However the Russian-Ukraine crisis makes it impossible to achieve an agreement now. On the other hand, as MF-Milano Finanza wrote that another potential candidate is the Angola sovreign wealth fund, Cremonini admitted that African sovreign funds might be good allies.
