A merger between Swiss food&beverage vending machine management group Selecta and Italian Argenta group seems closer (see here a previous post by BeBeez), after that US private equity giant Kkr had announced the acquisition of almost the entire capital of Selecta from Allianz Capital Partners last Monday, October 12th (see here the press release). Kkr is buying a stake in Selecta of more than 90% with minority investor BlueBay staying invested.
MF Milano Finanza writes today that all circumstances now point to a potential merger between Selecta and Argenta coming in the next future.
In June 2014 Kkr helped Selecta to refinance mezzanine debt and avoid a debt restructuring. Kkr actually made a 220 million euros PIK loan (payment-in-kind loan withr capitalized interests at maturity) to the group. The loan pays an annual 18% yield and provides Kkr with wearrant representing 35-40% of Selecta’s capital. At the same time Selecta issued 550 million euros in senior high yield bond to refinance the rest of its existing debt (download here the press release).
In January 2014 Kkr had invested 100 million euros in shares and notes issued by Argenta (download here the press release). Kkr became then a minority shareholder of the Italian group which is controlled by Motion Equity Partners (through Settembre spa) and allowed Argenta to repay its junior debts to Italian banks Unicredit and Mediobanca which was part of a financing facility the banks prepared in 2009 in support of a capital increase of the group.
In 2013 Argenta reached 191.4 million euros in revenues (from 196-8 millions in 2013) and 43-6 millions of adjusted ebitda (from 44.7 millions) with a net financial debt of 211.4 millions (from 216.8 millions).
Selecta posted 550.4 million euros in revenues in the nine months ending on June 30th (revenues were 697 millions in FY 2013-2014 ending on September 30th and 714 million in the 12 months ending on June 30th 2015) with 86.7 millions of adjusted ebitda (127.4 millions in FY 2013-2014) and a net financial debt of 866.4 millions (download here Q3 Selecta’s financial statementst and la Selecta’s investors presentation).
And looking at financial year’s ending dates, it might be a coincidence but a few weeks ago both Argenta and Settembre’s extraordinary meetings voted in order to change the two Italian companies’ financial years ending dates to September 30th from December 31st, starting from the current year. So now Argenta’s financial year ends the same date of Selecta’s. And this fact adds to the purchasing policies by the two groups had been aligned since last year.
Moreover, as Kkr’s current investments in this field include Germany-based WMF, a manufacturer of coffee machines and kitchenware, rumors are that WMF too might be part of Kkr’s project to build a bigger group in the sector.