FSI, the private equity firm led by Maurizio Tamagnini, announced last Friday an investment for a 35% stake of Sterling, a Perugia-based company that produces active pharmaceutical ingredients. More in detail, FSI is committed to forging a partnership aimed at creating a reference company at European level in the production of active ingredients (see the press release here).
To this end, FSI supports the Ferlin family, founder of Sterling, by acquiring shares almost entirely by way of a capital increase in exchange for 35% of the group with the Ferlin family who will retain control with 65%. Resources that will allow Sterling to undertake an ambitious development plan both internally and through acquisitions.
FSI was assisted by ISP Healthcare (consultant on the business side), KPMG (financial and ESG due diligence), by Pavia & Ansaldo (for tax aspects) and by Ashurst for legal aspects, while Sterling was assisted by the law firm Stefano Mazzi lawyer.
With a turnover of around 50 million euros and around 300 employees, Sterling is a leader in the active ingredients used to treat diseases in the oncology, respiratory and dermatology fields. More than 90% of the turnover is generated across borders. Over the years Sterling has managed to establish itself as a long-term partner of the main pharmaceutical companies worldwide, becoming a point of reference in terms of innovation, quality and reliability.
Italy is the European leader in pharmaceutical products with a turnover of 31 billion euros, followed by Germany and France. Italy is also the European leader in exports, which represents about 85% of total turnover and which grew by 140% in the decade 2010-2020. However, this aggregate leadership is offset by considerable fragmentation, with only 11 companies billing over 500 million euros. Also for this reason, the pharmaceutical sector is one of the priority sectors for FSI, consistent with FSI’s vocation as a “mission-related” investor in the Italian economy and with the National Recovery and Resilience Plan.
“The purpose of this partnership is to participate in the necessary evolution of a fundamental sector for Italy. The alliance with FSI was designed to equip Sterling with an important financial asset and allow it to acquire strategic resources with the aim of implementing the development plan envisaged by the Company for the next five years. With this transaction, Sterling intends to confirm its desire to fuel the development of the pharmaceutical sector in the territory and increase its position as an international reference ”, declared Simone Ferlin, chairman and ceo of the company of the same name.
“FSI’s investment, in support of Sterling and in partnership with the Ferlin family, aims to accelerate the development of an Umbrian company of excellence in the production of active pharmaceutical ingredients, where Italy holds a leadership position in European and world level. The intervention in the capital aims to strengthen investments in Research & Development, expand the production base and ensure the financial flexibility necessary for acquisitions. The hope is to accompany the Ferlin family in a process of transformational growth similar to the one we have been undertaking for years with the Marcucci family in Kedrion“, Mr. Tamagnini said.
In fact, we recall that FSI has been an investor since 2019 in the capital of Kedrion, a leading Italian group in the production of blood products, which was then sold to Permira last January, but in which FSI has reinvested for a minority (see here a previous article by BeBeez). More in detail, Permira, together with the Abu Dhabi Investment Authority (ADIA), the sovereign fund of Abu Dhabi, acquired 65-70% of Kedrion, until then controlled by the Marcucci family and also owned by the FSI fund itself and by CDP Equity (through FSI Investimenti spa , a joint venture between CDP Equity at 77.1% and the Kuwait Investment Authority at 22.9%, investors since 2012). Kedrion was valued at around 2 billion euros, considering the 555 million euros of net financial position at the end of September 2021 and an equity value between 1.3 and 1.5 billions. In the deal, both the Marcucci family and FSI have undertaken to reinvest upstream of the control chain, while CDP Equity has reserved a reinvestment option for approximately 5%, alongside the Marcucci (17%) and FSI (13%)
We recall that last July CDP Equity announced the sale of its entire 39% stake in FSI sgr to the same private equity fund company led by Maurizio Tamagnini, 51% controlled by the management and 9.9% owned by Poste Vita (see here a previous article by BeBeez).
FSI manages the FSI I fund, a 1.4 billion euro capital fund for growth (see here a previous article by BeBeez). Investors include Mediolanum and all the main Italian banks from UniCredit, Intesa Sanpaolo, BancoBPM, up to Mediobanca. There are also the Cariplo and CRT Foundations and then obviously there are CDP (with a commitment of 500 million euros) and Poste Vita. Finally, among investors there are the primary international private equity investors, including Tikehau Capital, and some sovereign funds such as KIA (Kuwait), the European Investment Fund, QIA (Qatar), Temasek (Singapore) and SOFAZ ( State Oil Fund of Republic of Azerbaijan).