First episode of EY M&A Compass, the in-depth look at the Italian M&A market developed by EY together with BeBeez
Article published in BeBeez Magazine no. 17 of 27 January 2023
Last year saw solid investment activity in Italy and a strong liveliness in the number of transactions announced. Approximately 1210 deals were closed with targets in Italy, substantially in line with 2022, worth EUR 58.6 billion, according to the latest EY M&A Barometer – Review 2023 and Preview 2024 (see here a previous article by BeBeez), after the EUR 93.7 billion and 1301 deals of 2022 (revised data compared to the preliminary ones released in January 2023, see here a previous article by BeBeez). Similarly, the North-Eastern regions and Emilia-Romagna, as far as the number of deals is concerned, showed good resilience, in the first case, with 270 deals, maintaining the same level of activity as the year before, and in the second case, with 189 deals, registering only a slight drop. Luciana Sist EY Private Strategy & Transactions Leader, told BeBeez on the occasion of the first episode of EY M&A Compass, the in-depth analysis of the Italian M&A market developed by EY together with BeBeez.
To give a few examples of important transactions in the North East of taly last year, we mention the sale of the majority of the capital of Vetrerie Riunite (from Sun Capital to Teak Capital and Tangor Capital), of TMCI Padovan (from Synergo to Investindustrial), of Pratic F.lli Orioli (from Orioli brothers to PAI), Cicli Pinarello (from L Catterton to a foreign family office), LimaCorporate (from the Swedish fund EQT to Enovis), the entry of the Charterhouse fund into the capital of Labomar and the sale of a minority stake in Nice to FSI. Private equity funds and family offices based in the North East of Italy were also very active: Palladio Finanziaria, Alcedo, Uturn Investments, Itago, Red Circle, Veneto Sviluppo, and Friulia, which carried out a dozen transactions in Italy The most significant transaction abroad was carried out by De’ Longhi, which through a business combination between Eversys (Switzerland) and La Marzocco (based in the US) created a professional coffee machine hub.
Lastly, as far as Emilia Romagna is concerned, we find the sale of a minority stake in IMA to BDT & MSD Partners, the sale of Arag to the American corporation Nordson, the entry of Cassa Depositi e Prestiti and Enpaia into the capital of Granarolo, the entry of the HIG Capital fund into the capital of Pinalli and the acquisition of the Spaggiari Parma group by Ambienta. The Emilia companies most active abroad were Interpump and the two pharmaceutical companies Chiesi Farmaceutici and Alfasigma.
Question. How much did activity in the two regions account for the total m&a in Italy last year?
Answer. The North East, meaning Veneto, Friuli and Trentino Alto Adige, accounted for around 20% of total m&a transactions madfe nationally, while Emilia Romagna accounted for around 14%. The transactions we mapped include both transactions in which the acquired company is located in the region and transactions involving acquiring companies based in the region that have acquired targets in the rest of Italy.
Q. How are the transactions you have mapped distributed in the North East?
A. Of the total of 270 transactions mapped in the North East, 174 transactions involved companies acquired in the region, while the other transactions involved Veneto, Friuli and Trentino based companies that acquired targets in the rest of Italy (59 transactions) and abroad (37 transactions). More in detail, the 270 transactions involved 192 companies in Veneto, 40 in Friuli and 38 in Trentino. Compared to 2022, the number of transactions announced abroad by companies based in the North East doubled, from 20 to, as mentioned, 37, while the number of acquisitions by companies located in the North East decreased slightly, from 192 to 174, between 2022 and 2023.
Q. What about those in Emilia Romagna?
A. During 2023 the Emilia-Romagna region announced, as mentioned, 189 m&a deals, of which 97 deals related to target companies located in Emilia-Romagna (from 140 deals in 2022) and the rest related to acquisitions conducted by companies based in Emilia-Romagna on target companies located in the rest of Italy Italy (67 from 54 in 2022) and abroad (25 from 15).
Q. What was the weight of foreign buyers in the two regions?
A. 78% of the transactions mapped for the North East were carried out by Italian buyers, 15% by European companies (mainly German and French). The remaining transactions are divided between buyers based in the United States, China, and the Far East. As for Emilia Romagna, 62% of transactions were made by Italian buyers, 23% by European companies (mainly French, Austrian, Swedish and Swiss). The remaining transactions are divided between buyers mostly based in the United States and Japan.
Q. What was the weighting of private equity investors compared to that of strategic investors?
A. In both regions, the weight of strategic buyers was predominant. In particular, in the North East almost 80% of the transactions were made by corporate buyers, with the remaining 20% by financial investors. Slightly higher was the percentage of deals by funds in Emilia Romagna, which stood at 30%. In both cases, these percentages are lower than the 40% calculated for Italy as a whole.
D. What about areas of interest?
A. From a sectoral point of view, the industrial sector ranks first in the North East, with 90 transactions, followed by the consumer products sector with 42 transactions. The technology sector ranks third with 23 transactions, followed by energy and utilities with 18, while the remaining transactions belong to other sectors, such as life science, business services, and so on. The industrial sector also holds first place in Emilia Romagna with 81 transactions, followed by the consumer products sector with 22. The technology sector and the business services sector are tied for third place with 20 transactions, followed by life science with 16, while the remaining transactions belong to other sectors, such as energy & utilities and financial services.