NB Renaissance Partners, the family of the co-founder Valentino Sciotti and other minority shareholders have sold 100% of Farnese Vini to US private equity firm Platinum Equity (see the press release here). The co-founder Valentino Sciotti will reinvest alongside Platinum Equity and will remain the company’s executive president.
NB Renaissance had given the exploratory mandate for the exit from Farnese Vini in October 2019 to the advisor Lazard, who in turn had sent the dossier to private equity funds and strategic groups (see here a previous article by BeBeez).
Founded in Ortona, Abruzzo, in 1994, by Valentino Sciotti (president and managing director) and Filippo Baccalaro, Farnese includes the brands Caldora, Feudi di San Marzano, Vesevo, Vigneti del Vulture and Vigneti Zabu. In January 2013 the 21 Investimenti fund, led by Alessandro Benetton, had acquired the majority of the company from non-operating shareholders (the De Iuliis family, Cascina Holding Bv and Tommy Investments Ltd) and exceeding 50% of the share capital (see here a previous article by BeBeez).
In August 2016, then, 21 Investimenti in turn had sold its stake to NB Renaissance (see here a previous article by BeBeez). At the time, Farnese Vini was valued around 7x the expected ebitda for 2016, which was seen at 20% of the turnover estimated at 56 million euros for the end of that year, for an enterprise value therefore around 70 million euros.
In the three years of NB Renaissance Partners’ investment, Farnese’s revenues increased by 13% on average per year (CAGR) from 52 million euros in 2016 to more than 76 million euros in 2019 (from 75 million in 2o18) and ebitda increased by 18% per year (CAGR) to more than 17 million euros in 2019 (although below 18.8 million in 2018). The ebitda margin therefore increased from 20.6% in 2016 to 23% in 2019. The net financial debt was 30.8 million euros at the end of 2018 (see here the analysis of Leanus, once registered for free) . The sale price was not officially communicated, but broker Equita sim in a note dated January 2nd, dedicated to the Milan-listed Masi Agricola, underlined that Platinum purchased Farnese Vini on the basis of an enterprise value of approximately 170 million euros, therefore with a multiple of the expected ebitd for 2019 of about 10x.
NB Renaissance Partners, the Sciotti family and the other minority shareholders were assisted in the deal by Gatti Pavesi Bianchi (legal advisor), EY Parthenon (for the commercial part) and EY (for the accounting and fiscal part). Lazard and Ethica acted as financial advisors to the sellers. Platinum Equity was assisted by Latham & Watkins (legal advisor), Estin & Co., Pearson Ham and Efeso (commercial) and Deloitte (accounting and tax part). Fineurop Soditic and Equita acted as financial advisors to the buyer.
Valentino Sciotti, executive president of Farnese Vini, said: “After the excellent results achieved thanks to the support of NBRP, we believe there are significant untapped growth opportunities in new markets and segments, especially in emerging countries, where millennials are making the ‘wine experience’ a new habit. ”
The company has built its success on an innovative, flexible and asset-light business model: Farnese does not own the vineyards, but supplies grapes and wines through long-term relationships with around 200 small winemakers and winemakers, mainly in the regions of Southern Italy characterized by a high quality of wine. Farnese Vini directly manages two of its own production plants. Since the entry of the funds, the company has launched the production and sale of Apulian wines, invested over 10 million euros in production capacity in two modern factories in Abruzzo and Basilicata, doubled the number of employees and substantially increased its turnover, with sales in over 80 countries worldwide.
The company generates 97% of its revenues outside of Italy: its main markets are Germany, Switzerland, Canada, Holland, Belgium and Japan. Farnese also sells both to the on-trade channel (restaurants, wine bars, hotels) and to the off-trade channel (retail chains).
For Platinum Equity this is the second Italian deal in a few months. In fact, at the end of October, it announced the acquisition of the majority of the De Wave Group, specialized in the design, production and installation of public areas of ships, from Xenon Private Equity (see here a previous article by BeBeez). De Wave was the first Platinum Equity transaction in Italy.
