At the end of a long auction api (anonima petroli italiana spa) announced the acquisition of the entire capital of TotalErg spa, a joint venture between Italian oil&gas company Erg spa (51%) and French oil&gas company Total (49%). The closing of the deal is expected by the end of next January 2018 after Competition Authorities authorization (see here api’s press release).
Information memorandum was sent to potential bidders last January. Beyond api, interested bidders were said to be Qatar Petroleum, Kuwait Petroleum, Vitol and international private equity firms such as Carlyle, Kkr and Terra Firma (see here a previous post by BeBeez).
More in detail, Api, which is active in oil refinement and fuel distribution, signed a binding offer a few days ago with Erg spa and Total Marketing Services sa, in order to buy 100% of TotalErg, which owns more than 2,600 fuel stations, a logistic pole in Rome and a 25.16% stake in a oil refinery in Trecate (Novara).
The deal will allow to the Italian group chaired by Mr. Ugo Brachetti Peretti to consolidated its position in the Italian oil downstream sector. The new group will actually own 5 thousand duel stations in Italy, activities in two refineries Falconara Marittima (Ancona) and Trecate and a logistic platform both on the Tirreno coast and the Adriatic coast. Pro forma figures for this year see the new group reahing 6 billion euros in revenues.
Api reached 2.34 billion euros in revenues in 2016, with 41.8 million euros in ebit, 3.16 millions in net profit and a net financial debt of 195.5 million euro.
Erg will cash an equity value of 273 million euros. This figure includes both a 71 million euros extraordinary dividends component already distributed by TotalErg (of which 20 million euros paid last May and the rest last October) and deferred components for 36 million euros, structured as a vendor loan maturing in 5.5 years which has been subscribed by api itself (see here Erg’s press release).
All the above meaning that the equity value of the whole joint venture, without extraordinary dividends (but including deffered components) is about 400 million euros and that the enterprise value is about 680 million euros, including the 280 million euros net financial debt (see here an analysis by Leanus, after free registration and login).
The deal is financed by Unicredit, UBI Banca and Banco Bpm. In the deal UniCredit is api’s financial advisor while Bonelli Erede is the legal advisor. Erg is instead supported by Hsbc (financial advisor), DLA Piper (legal advisor) and EY (accounting & tax).
TotalErg had sold last August its heat services subsidiary Restiani spa to Ambienta sgr private equity firm and to Aber srl (si veda altro articolo di BeBeez) and last October sold its LPG distribution subsidiary to Totalgaz Italia srl to UGI Italia srl
