LimaCorporate, an Italian orthopedic prosthesis manufacturer controlled since December 2015 by the Swedish private equity fund EQT, following a management buyout (see here a previous article by BeBeez), ends up in the arms of the NYSE-listed U.S. Enovis Corporation. This was announced yesterday afternoon by the two companies (see LimaCorporate’s press release here and Enovis’ press release here), stating that Enovis will pay LimaCorporate €800 million, including €700 million in cash to be paid at closing and €100 million in newly issued ordinary shares of Enovis to be issued within 18 months of closing. The transaction is expected to be completed in early 2024.
Not only that. LimaCorporate’s note further states, “Enovis intends to redeem, repay, and/or fully cancel certain debt of LimaCorporate at or near the closing of the transaction, including LimaCorporate spa’s senior secured floating-rate bonds due 2028 and the outstanding revolving credit facility.” Financial advisors on the transaction for ENovis were UBS Investment Bank and JP Morgan Securities, while legal advisor was Allen & Overy.
As a reminder, in the first quarter of this year Lima Corporate refinanced its senior secured bond and revolving line with a new €310 million bond maturing in February 2028 with a coupon equal to the 3-month euribor rate plus 575 bp, and secured a new €65 million revolving line maturing in November 2027 with interest equal to the 3-month euribor rate plus 375 bp, at the same time as a €46 million capital increase, subscribed by EQT (see here a previous article by BeBeez). Of this line until the end of June, 7 million euros had been drawn,
Led by ceo Massimo Calafiore, LimaCorporate had ended 2022 with €248.5 million in revenues, adjusted ebitda of €66.2 million, and net financial debt of €320.9 million (see the investors’ presentation here) and has now closed the first half of 2023 with €143 million in revenues (up from €122.4 million at the end of June 2022), adjusted ebitda of 39.4 million (up from 33 million) and net financial debt of 314.6 million (see here the half-yearly report as of June 30 and here the presentation to bondholders).
Meaning that Enovis to repay LimaCorporate’s debt will put at least 315 million euros on the plate, for an enterprise value of LimaCorporate, therefore, that exceeds one billion euros, as already speculated last June by BeBeez, when rumors had spread about an acceleration of the listing process and the pool of banks that was to act as global coordinator, composed of Morgan Stanley, Mediobanca, Goldman Sachs and BNP Paribas, had been appointed (see here a previous article by BeBeez).
A listing or a trade sale to an industrial entity had, moreover, begun to be talked about as early as early 2020, when EQT had mandated Morgan Stanley and Credit Suisse on the basis of a one billion-dollar valuation (see here a previous article by BeBeez). The outbreak of the pandemic had then put the listing project on hold, and subsequently the sales process had also been put on hold by EQT last year (see here a previous article by BeBeez). This decision had coincided with the exit of ceo Luigi Ferrari, a historical presence at the company, who had reinvested in a minority stake after the sale in December 2015 to EQT by Ardian, the Lualdi family, NB Reinassance, and MIR Capital.
Founded in 1945 by the Lualdi family, LimaCorporate has grown over the years to become one of Europe’s leading orthopedic companies, expanding its product portfolio primarily through internal innovation and the advancement of its 3D printing capabilities. For the coming year, forecasts are for revenues between $290 million and $300 million and adjusted ebitda between $70 million and $75 million.
By joining the Enovis Group, LimaCorporate will benefit from an increased global network and new business opportunities due to the complementary product portfolio and market penetration of the two companies. The new investments will accelerate the completion of the new production building at the San Daniele del Friuli headquarters.
As for Enovis, the entry of LimaCorporate will bring the group’s reconstruction business to $1 billion in sales, with about 50 percent of revenues related to the rapidly growing extremities markets. “We are confident that the acquisition of Lima will allow us to leverage our strong growth trajectory and global leadership in orthopedic solutions to create immediate and sustainable value for our patients, customers, employees, and shareholders,” said Matt Trerotola, chairman and ceo of Enovis, who added, “With Lima’s surgical solutions and complementary customers, we will have the opportunity to expand our portfolio of profitable reconnaissance and further expand our global presence. In addition, this acquisition will enable us to achieve improved financial results through significant revenue growth opportunities from cross-selling and significant cost synergies.”
“The combination of these two leading orthopedic companies into a single global platform creates an exciting opportunity to leverage the strengths of Enovis and Lima in the development of patient-tailored orthopedic devices and products,” said Massimo Calafiore, ceo of Lima.
And Matteo Thun,, partner in EQT Private Equity’s advisory team, concluded, “LimaCorporate is a true example of sophisticated engineering and technology designed to empower surgeons and improve patients’ lives. EQT is proud to have been a part of the company’s journey, and I would like to thank the management team and all of LimaCorporate’s employees, who work enthusiastically every day to bring life-changing products to patients around the world. It is exciting to see a global player like Enovis join LimaCorporate in such a strategic combination.”
