United Technologies Corporation (UTC), a a-New York listed leading provider of high technology products and services to the building systems and aerospace industries across the world will acquire Gruppo Riello, Italy’s leader in manufacturing systems and technologies for heating and cooling in the residential and professional sector, operating with Riello, Beretta, Thermital, Sylber, Vokera, Fontecal and FIT Service brands (download here the press release).
More in detail, the deal will be implemented through United Technologies Holdings Italy srl, which is part of UTC Climate, Controls & Security (UTC Group), in turn a provider of heating, ventilating, air conditioning (HVAC) and refrigeration solutions.
United Technologies Holdings Italy srl will buy a 70% stake in Riello’s capital while the Riello family will retain the remaining 30%. The deal is expected to close by the beginning of 2016.
The market has been rather difficult for Riello Group in the last few years even if the group still reached 500 million euros in revenues in 2014 and 59 millions in ebitda, thanks to higher exports. However Riello’s chairman, Ettore Riello, has been involved in talks with its lending banks (Unicredit, Intesa Sanpaolo, Banco popolare, Bpm, Veneto Banca and BnpParibas) since last Spring in order to restructure a pile of 340 million euros of debt which had been originated in 2006 when the banks supported Mr. Riello in buying back a 50% stake in the company from the paneuropean private equity fund Carlyle.
At the same time Mr. Riello has been busy in looking for a partner who could inject fresh capital in the company as he did not want its debt to be sold to Pillastone, the new turnaround operator launched by Kkr together with Unicredit and Intesa Sanpaolo, with the two Italian banks bringing some of their distressed loans to the new veichle (see here a previous post by BeBeez).
Some private equity fund had been rumored to have been interested in the deal such as Apollo Management, Elliott Management (this one together with Blue Sky), Kps Capital Partners and Triton. Some industrial palyers such as Italian Ariston Thermo and British Bdr Thermea were said to have seen the dossier.
Riello was supported by d’Urso Gatti Pavesi Bianchi law firm and by Lazard and studio Zilli, Tabanelli & Associati as for the financial issues. UTC was advised by Linklaters law firm.
