Piedmont’s Capital Markets - Osservatorio PMI - ENG(1).pdf · SMEs Outlook –July 2018 4...

Piedmont’s Capital Markets:

SMEs OUTLOOKBIANNUAL UPDATE

Number 5 - July 2018

2SMEs Outlook – July 2018

Index

I. Executive Summary Page 4

II. Debt Capital Markets – ExtraMot PRO Page 6

a) ExtraMot PRO: a market tailored for SMEs

b) The MiniBond market

c) Piedmont’s market

d) Case study – Car Clinic

III. Equity Capital Markets – AIM Italy Page 16

a) AIM Italy – Tax credit & Bylaws updates

b) AIM Italy – Market highlights

c) Case studies – Pininfarina and Italian Wine Brands

d) SPAC: overview & case study – Guala Closures Group and Space4

IV. M&A – Deals in Piedmont, H1 2018 8

V. Contacts and disclaimer Page 32


Index

I. Executive Summary

II. Debt Capital Markets – ExtraMot PRO





III. Equity Capital Markets – AIM Italy





IV. M&A – Deals in Piedmont, H1 2018

V. Contacts and disclaimer


Abstract

The Analysis on the state of Piedmont’s capital markets for SMEs was initially released in July 2016 as a result of a partnership

between the Unione Industriale di Torino (the employers’ association of Turin) and ADB Corporate Advisory SpA. This work aims to

provide an update on the latest ECM, DCM and M&A transactions carried out in Piedmont. With its semiannual frequency, this analysis

is meant to offer a deeper look into local companies approaching capital markets, thus innovating their capital structure as well as their

relationship with stakeholders.

Latest news

Debt Capital Markets – ExtraMot PRO

H1 2018 has suffered a decrease in bond issuing (page 10);

Equity Capital Markets – AIM Italy

Introduction of tax benefits for SMEs that decide to go public (page 16);

AIM’s bylaws was signifincantly renewed, thus making the market more transparent and functional (page 17);

Focus on SPACs: what are they and how they work (page 24);

M&A

Increasing number of M&A transactions during H1 2018 (page 28).

Executive summary

Source: Il Sole 24 Ore


Index















ExtraMot PRO

Audited financial statements or willingness to do so for the

LFY;

No micro-enterprises (organic must be over 9 units, turnover or

total assets ≥ € 2M);

Legal form must be Srl, Scrl, SpA or ScpA;

No startups.

Process &

costs

First contact: the issuer contacts the Italian Stock Exchange to outline transaction details and timing;

Informal pre-filing: the last two financial statements (at least the last one audited) are sent to the Italian Stock Exchange by the issuer;

Formal filing: the Prospectus and the Admission Document, together with a document outlining key details of the transaction, are sent to

the Italian Stock Exchange;

Beginning of trading: the Italian Stock Exchange verifies paperwork completeness and then publishes the «Beginning of Trading» note;

Fixed costs: there is a fixed listing fee per security of € 2.500, (€ 500 in case the security has been listed previously on another regulated

market). This is a one-off expense, no additional costs of any kind will be charged by the Exchange.

Minimum requirements Quantitative requirements

Valid market positioning;

Skilled and experienced management;

Solid and detailed business plan;

Profitability and not excessively levered capital structure;

Ability to generate free cash flows;

Local brand awareness.

ExtraMot PRO: a market tailored for SMEs

ExtraMot PRO:

Established by the Italian Stock Exchange in 2013;

Qualified investors only;

Listing of bonds, financial bills, equity-related securities and project bonds.

Source: Italian Stock Exchange


The MiniBond market

Security

overview

MiniBonds are debt securities issued by Italian companies, typically SMEs, generally aimed to finance development plans, capex or

refinancing. Issuing a Minibond brings unlisted companies to open up to capital markets, thus allowing the issuer to diversify its sources

from traditional bank financing;

MiniBonds are generally a support tool for the operationally healthy companies, with solid results over the last years and with specific

growth plans for the forseeable future;

Investing in MiniBonds is reserved to qualified players (banks, investment companies, SICAV…).

2018 Issues In the period ranging from January 1, 2018 to June 30, 2018, 16 MiniBonds have been listed on ExtraMot PRO, with an aggregate value

of € 47,2M.

Key players involved in a MiniBond Issuing

Liquidity is the biggest concern: these securities are illiquid, as they belong to a niche sector reserved to institutional investors. However,

a MiniBond is well suited for the so-called patient investors (foundations, pension funds, closed funds...).

Advisor Arranger Legal Audit company Rating agency

Supports the issuer

during the whole

listing process.

Places the

securities on the

market.

Looks after

documents

compliance.

audits the latest

financial

statements.

Releases an

independent

opinion on issuer’s

creditworthiness;

Rating is, however,

not mandatory.



Transactions advised by ADB Corporate Advisory

ExtraMot PRO: listings over the last 18 months

Number of listings Average rate

64 4,38%

2017

8 periods moving average

Coupon rate

2018

Data referred to the period January 1, 2017 – June 30 2018

Source: Italian Stock Exchange press releases. This chart includes only the issues < € 50M and the different rates applied. For floating rate issues, only fixed spread was considered.

Total Outstanding

(€/M)

Average

Outstanding (€/M)

310,4 4,4

4,2 7,0

0,4 0,4

0,2 6,0

0,5

10,0

5,0

1,0

1,0

0,5

5,0

0,4

8,0

0,3 0,4

0,4 3,0

1,0 3,0

6,3 4,2

0,2 0,1

0,2 0,6

2,0 3,0

1,8 0,6

1,0 0,4

0,4

50,0

35,0

0,1

20,0

15,0

0,1

0,4

17,0

0,3 1,0

1,7

30,0

10,0

0,3

0,2 0,3

0,7 2,7

0,3 0,5

1,0

6,0 8,4

0,1 1,7

0,3 3,0

6,0

0,4

1,0 0,5

8,0

2,0 0,6

0,4 1,9

5,4

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

7,00%

8,00%

-

10,0

20,0

30,0

40,0

50,0

60,0

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Casati

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Pay back

Average rate: 4,96%

Average maturity: 4,1 years

Average size: € 5,8MTypology

Issuer

Headquarter

There have been 3 issues in Piedmont in 2018 (up to June 30), which represent 19% of the

16 listings on ExtraMot PRO. MiniBonds are the most common typology of financing method

(96%) compared to financial bills (4%). Over half (57%) of listed MiniBonds have an

amortizing structure; issuers are mostly located in the Turin area (64,3%).

Overview of Piedmont’s MiniBond market


Statistical data exclude the issue of Guala Closures Group of € 500M. For floating rate issues, only the fixed spread was considered.

MiniBond; 96%

Financial bill; 4%

Amortizing; 57%

Bullet; 43%

Turin area; 64%

Rest of Piedmont;

36%

http://www.hdmitalia.com/


Data in €/000

Quarterly breakdown of Piedmont’s issues

Maturity breakdown (July 2013 – June 2018)


#5 #7 #6 #6 #3#1

Number of issues per year

#5

Number of listings per year% compared to Piedmont’s total issues

1

1

First MiniBond issue

3.000

20.000

8.000

17.000

69.750

2.200 3.000 3.800 350

5.400 1.350

17.700 10.400

2.000

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2013 2014 2015 2016 2017 2018

#5 #10 #7 #1

18% 18%

36%

25%

4%

< 1 year 1 - 3 years 3 - 5 years 5 - 7 years > 7 years


Piedmont’s listings (≤ € 50M) 1/3

Company ISIN Coupon Rate Size (€) Issuing Date Maturity Date Maturity (Years) Pay Back

C.A.A.R. SpA IT0004923816 6,50% 3.000.000 01/07/2013 01/07/2018 5 Amortizing

IPI SpA IT0005010480 7,00% 20.000.000 10/04/2014 10/04/2021 7 Amortizing

S.I.G.I.T. SpA IT0005042939 6,25% 6.000.000 11/08/2014 11/08/2019 5 Amortizing

Tesi SpA IT0005054744 5,60% 2.000.000 29/09/2014 29/09/2019 5 Amortizing

Geodata SpA IT0005058190 6,40% 7.000.000 10/10/2014 10/10/2020 6 Amortizing

Olsa SpA IT0005072712 4,75% 10.000.000 19/12/2014 19/12/2019 5 Bullet

Rapetti Food Service Srl IT0005069569 5,60% 2.000.000 26/01/2015 25/01/2018 3 Bullet

Asja Ambiente Italia SpA IT0005091035 6,75% 12.000.000 03/03/2015 31/10/2023 9 Amortizing

Boni SpA IT0005089674 5,00% 750.000 06/03/2015 30/09/2015 1 Bullet


EGEA SpA IT0005095150 5,50% 15.000.000 31/03/2015 31/03/2021 6 Amortizing

Essepi Ingegneria SpA IT0005105884 5,40% 2.200.000 20/04/2015 20/04/2020 5 Amortizing

Gino SpA IT0005138000 5,00% 3.000.000 10/11/2015 10/11/2020 5 Amortizing

Prima Industrie SpA XS1184770144 5,88% 40.000.000 06/02/2015 06/02/2022 7 Bullet




C.A.A.R.: single issue with two different ISINs. The € 300.000 tranche has a lower coupon rate as is secured by the EIF


Company ISIN Coupon Rate Size (€) Issuing Date Maturity Date Maturity (Years) Pay Back

Essepi Ingegneria SpA IT0005157802 5,40% 2.800.000 12/02/2016 12/02/2022 6 Amortizing

Boni SpA IT0005171977 4,10% 1.000.000 23/03/2016 20/12/2016 1 Bullet

Boni SpA IT0005204653 4,20% 350.000 29/07/2016 31/07/2019 3 Amortizing

OSAI SpA IT0005220162 3,75% 1.000.000 12/12/2016 29/03/2017 0,3 Bullet

HDM SpA IT0005222101 5,00% 4.000.000 23/12/2016 23/12/2021 5 Bullet

OSAI SpA IT0005248619 3,75% 1.000.000 13/04/2017 15/12/2017 1 Bullet

Green Bit SpA IT0005260077 4,10% 350.000 30/06/2017 20/12/2017 1 Bullet

Centrale del Latte d’Italia IT0005316184 3,25% 15.000.000 01/12/2017 01/12/2024 7 Amortizing

Boni SpA IT0005316879 4,75% 1.700.000 15/12/2017 15/12/2022 5 Amortizing


OSAI SpA IT0005318495 3,60% 300.000 22/12/2017 22/12/2018 1 Bullet

IPI SpA IT0005284390 5,00% 8.400.000 10/01/2018 10/01/2023 5 Amortizing

C.A.A.R. SpAIT0005325227

IT0005325201

5,25%

4,75%

1.700.000

300.00023/02/2018 23/02/2024 6 Amortizing

CAR CLINIC Srl IT0005334039 3,25% 2.000.000 31/05/2018 31/05/2023 5 Amortizing


2%

3%

4%

5%

6%

7%

8%

0 1 2 3 4 5 6 7 8 9 10Maturity (years)

Coupon r

ate

*C.A.A.R.: single issue with two different ISIN



New issue of the semester

*


Car Clinic is the largest italian repair services provider for cars and

commercial vehicles bodies;

Currently its network includes 32 specialized centres owned

directly and 12 partner centres spread on the national territory;

Most of the specialized centres are located in Northern Italy; however

Car Clinic is also present in Rome and in key locations in the

South;

The Headquarter is located in Avigliana, in the Turin area.

The Company Key financials 2017

Issuer

Financial Advisor

Arranger

Auditor

Legal Advisor

Total Revenues

€ 31,0M

EBITDA

€ 3,4M (10,9%)

Number of centres

32

NFP / (Cash)

€ (0,4M)

CAGR Total Revenues 15 - 17

36,1%

Net Income

€ 1,3M

Deal specifics

Outstanding:

€ 2M

Maturity:

5 yearsRanking:

Senior Unsecured

Repayment:

Amortizing (starting from

year two)

Coupon Rate:

3,25%

Use of proceeds:

opening of new branchesMarket:

ExtraMot PRO

Involved parties Press coverage

Case study – Car Clinic

Source: company website


Index















SME

definition

Small Enterprise:

Less than 50 employees;

Annual turnover or total assets not exceeding € 10M;

Medium Enterprise:

Less than 250 employees;

Annual turnover not exceeding € 50M;

Total assets not exceeding € 43M.

Tax Benefit:

nature & use

The Budget Law 2018 grants a tax credit equal to 50% of the consulting costs (up to € 500.000) incurred by SMEs that will proceed to

list equity securities on a regulated market;

The above mentioned tax credit can be redeemed (as compensation) from the fiscal year that follows the listing process until the use is

exhausted. The benefit is available for three years, from 2018 to 2020;

The regulation has a double purpose:

Encourage SMEs capitalization;

Promote a more favourable environment for productive investments through more effective regulations.

Tax credit for SMEs

Source: Turin's Chamber of Commerce


Free float There is free float minimum requirement of 10%;

Among all investors at least 5 must be institutional (banks, pension and / or investment funds, financial institutions, asset managers…).

Equity research It is mandatory to produce a research concerning the issuer at least twice a year, simultaneously with the half year earnings press

release. SPACs and issuers that were already listed by January 3, 2018, are exempted from this obligation.

Pre-admission

notification The issuer must share an indicative price range within which the securities will be valued.

SPACs

Personal requirements have been introduced for SPACs’ promoters (Special Purpose Acquisition Company), including proven

experience;

The minimum raising leaps from the current € 3M to €30M, except for SPACs that derive from other SPACs’ splitting.

Changes to the AIM bylaws

Source: AIM bylaws


7 8 5 412

2117

3

18107

1520

24

36

57

74 77

95

105

2009 2010 2011 2012 2013 2014 2015 2016 2017 H12018

Sectorial Distribution Index AIM – H1 2018 Number of companies listed on AIM Italy

Breakdown of companies per Market Cap at IPO – H1 2018 Breakdown per capital raised on AIM

Data intervals of Italian Stock Exchange in €/M up to March 2018, ADB hypotheses for March - June

Source: Italian Stock Exchange – March report

AIM Italy - Highlights

Data intervals in €/M

Data analysed by the Italian Stock Exchange up to March 2018

* Data of the Italian Stock Exchange up to March 2018; H1 2018 accounts the IPOs

between March and June

*

11

32

16

24

19

< 10 10 - 30 30 - 50 50 - 100 > 100

< 3 ; 20%

3 - 5; 20%

5 - 10; 22%

10 - 15; 6%

> 15 ; 32%

Finance; 12%

Consumer Goods; 9%

Industry; 24%

Technology; 10%

Healthcare ; 5%

Services; 26%

Spac; 14%Chemistry; 1%


Listing on the Stock Exchange

The Italian

Stock

Exchange

Market Cap at 30/06/2018

Source: S&P Capital IQ

The analysis of Piedmont’s listed companies carried out in the SMEs Outlook goes beyond rigid quantitative parameters to offer a

snapshot of the Small & Mid Caps that have started the listing process on the stock market;

The selection concerns a sample of companies active in various areas of Production & Industrial Services, as well as companies

active in the Consumer Goods and Car & Components sectors. An update on either the former and the latter companies can be found

in the following table.

Company Sector Market of listingMarket Cap

(€/M)

Centrale del Latte d'Italia Consumer Goods STAR 41

Cdr Advance Capital Industrial Products & Services AIM 12

Cover 50 Consumer Goods AIM 42

Fidia Industrial Products & Services STAR 35

Ki Group Consumer Goods AIM 13

Italia Independent Group Consumer Goods AIM 21

Italian Wine Brands Consumer Goods AIM 92

Pininfarina Car & Components MTA 170

Prima Industrie Industrial Products & Services STAR 385


Performance of Piedmont’s Small & Mid Cap

Piedmont’s publically traded companies with low cap:

performances between July 2017 and June 2018

Data updated on 30/06/2018 Source: S&P Capital IQ

-18,50%

Performance:

∆ 12 months+ 5,41% +15,25% -17,39% -1,17% -30,89% -18,50% +11,60% +46,40% +39,31%

-40,00%

-30,00%

-20,00%

-10,00%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

03/0

7/2

017

10/0

7/2

017

17/0

7/2

017

24/0

7/2

017

31/0

7/2

017

07/0

8/2

017

14/0

8/2

017

21/0

8/2

017

28/0

8/2

017

04/0

9/2

017

11/0

9/2

017

18/0

9/2

017

25/0

9/2

017

02/1

0/2

017

09/1

0/2

017

16/1

0/2

017

23/1

0/2

017

30/1

0/2

017

06/1

1/2

017

13/1

1/2

017

20/1

1/2

017

27/1

1/2

017

04/1

2/2

017

11/1

2/2

017

18/1

2/2

017

25/1

2/2

017

01/0

1/2

018

08/0

1/2

018

15/0

1/2

018

22/0

1/2

018

29/0

1/2

018

05/0

2/2

018

12/0

2/2

018

19/0

2/2

018

26/0

2/2

018

05/0

3/2

018

12/0

3/2

018

19/0

3/2

018

26/0

3/2

018

02/0

4/2

018

09/0

4/2

018

16/0

4/2

018

23/0

4/2

018

30/0

4/2

018

07/0

5/2

018

14/0

5/2

018

21/0

5/2

018

28/0

5/2

018

04/0

6/2

018

11/0

6/2

018

18/0

6/2

018

25/0

6/2

018

Centrale del Latte d'Italia CdR Advance Capital COVER 50 Fidia Ki Group

Italia Independent Italian Wine Brands Pininfarina Prima Industrie


Sector multiples

Data updated on 30/06/2018

Fonte: S&P Capital IQ

DenominationMarket Cap

(€/M)

Enterprise Value

€/M

EV/

SALES

EV/

EBITDAP/E

EV/

SALES

EV/

EBITDAP/E

EV/

SALES

EV/

EBITDAP/E

Centrale del Latte d'Italia 41 104 0,6x 16,3x n.a. 0,6x 12,8x 101,2x 0,6x 11,8x 38,0x

Cdr Advance Capital 12 18 3,1x 5,3x 4,3x n.a. n.a. n.a. n.a. n.a. n.a.

Cover 50 42 32 1,2x 6,2x 13,1x n.a. n.a. n.a. n.a. n.a. n.a.

Fidia 35 41 0,9x n.a. n.a. 0,7x 7,9x 17,1x 0,7x 8,4x 14,2x

Ki Group 13 21 0,5x n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Italia Independent Group 21 46 2,4x n.a. n.a. 2,1x n.a. n.a. 1,9x n.a. n.a.

Italian Wine Brands 92 94 0,6x 6,0x 13,7x 0,6x 5,7x 9,7x 0,6x 4,6x 7,3x

Pininfarina 170 158 1,9x 22,2x 129,5x 1,4x 11,5x 28,1x 1,3x 9,9x 20,9x

Prima Industrie 385 455 1,0x 12,4x 20,8x 0,9x 8,5x 14,6x 0,9x 7,4x 11,9x

Minimum 12 18 0,5x 5,3x 4,3x 0,6x 5,7x 9,7x 0,6x 4,6x 7,3x

Mean 90 108 1,3x 11,4x 36,3x 1,1x 9,3x 34,1x 1,0x 8,4x 18,5x

Median 41 46 1,0x 9,3x 13,7x 0,8x 8,5x 17,1x 0,8x 8,4x 14,2x

Maximum 385 455 3,1x 22,2x 129,5x 2,1x 12,8x 101,2x 1,9x 11,8x 38,0x

Multiples 2017 (x) Multiples 2018E (x) Multiples 2019E (x)

Summary of Sample Data


-20,00%

-10,00%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

03/0

7/2

017

17/0

7/2

017

31/0

7/2

017

14/0

8/2

017

28/0

8/2

017

11/0

9/2

017

25/0

9/2

017

09/1

0/2

017

23/1

0/2

017

06/1

1/2

017

20/1

1/2

017

04/1

2/2

017

18/1

2/2

017

01/0

1/2

018

15/0

1/2

018

29/0

1/2

018

12/0

2/2

018

26/0

2/2

018

12/0

3/2

018

26/0

3/2

018

09/0

4/2

018

23/0

4/2

018

07/0

5/2

018

21/0

5/2

018

04/0

6/2

018

18/0

6/2

018

Pininfarina FTSE All Share Index

The Company Key Financials 2017

Performance Chart: Pininfarina vs. MTA

Case study – Pininfarina SpA

Pininfarina, historical car body manufacturer founded in Turin in 1930,

designs and produces unique models or limited series cars;

During its nearly 90-years history, Pininfarina has collaborated with

numerous car manufacturers, particularly in the luxury sector, such as

Ferrari and Maserati;

Today the Group’s activities focus on:

Design (automotive and non-automotive);

Engineering services (design, product development, testing

and prototype construction);

Extremely limited series, exclusive high quality cars

designing and manufacturing;

The company also provides a service dedicated to cars

refurbishment;

The company Headquarter is in Cambiano, in the Turin area.

Total Revenues

€ 87,1M

EBITDA

€ 7,5M (8,6%)

Number of locations

6 (4 abroad)

NFP / (Cash)

€ (11,9M)


2,6%

Net Income

€ 1,3M

Sources: company website and equity research

Main events of the year

On November 21, 2016 a capital increase was approved by

Shareholders. On July 11, 2017 Pininfarina announced the

conclusion of the transaction;

At the beginning of 2017, Pininfarina announced a new 65 million

contract with Hong Kong’s Hybrid Kinetic. The agreement

establishes that the historic Turin plant will support Hybrid Kinetic in

the development of an electric car;

At the end of 2017, the Group employeed 610 people, with 33 of

them hired in 2017.

The growth prospects for 2018-2020 are positive: analysts, in fact,

expect not only a growth in revenues, but also an increasing net

income, as well as a steady ability to generate cash.

Data updated on 30/06/2018

Source: S&P Capital IQ

Consolidated Figures


The Company Key Financials 2017

Price Performance Chart: Italian Wine Brands vs. AIM

Case study – Italian Wine Brands

Italian Wine Brands (IWB) was born from combining the experience

of over 100 years of Giordano Vini, a well-known Piedmont winery

that produces and sells Italian wines directly, and Provinco Italia, a

winery that distributes its products mainly on international markets;

IWB not only produces fine wines, but also offers to its customers

an accurate selection of gourmet products, coffee and extra-virgin

olive oil;

Every year the winery sells more than 48 million bottles, 75% of

which abroad;

The historic manufacturing site is located in Barolo, in the Langhe

region. Although the registered office is in Milan, IWB can be

considered a fully-fledged Piedmont company.

Total Revenues

€ 153,4M

EBITDA

€ 14,2M (9,2%)

Brands owned by the Group

12

NFP / (Cash)

€ 2,3M


4,5%

Net Income

€ 6,7M

Main Events of the year

In 2017 IWB experienced an increase in sales volume abroad

(+7%); reported figures suggest that the Group focused more on

exports and neglected Italy, thus losing market share and revenue

from sales in the domestic market (YoY - 9%);

Nonetheless, revenues are growing and, due to optimized operating

costs, the EBITDA has increased substantially since 2016 (+ 41%);

The growth prospects for 2018-2020 are positive: analysts, in fact,

expect not only a growth in revenues, but also an increasing net

income, as well as a steady ability to generate cash.

Consolidated figures

Sources: company website & equity research Data updated on 30/06/2018

Fonte: S&P Capital IQ

-10,00%

-5,00%

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

03/0

7/2

017

17/0

7/2

017

31/0

7/2

017

14/0

8/2

017

28/0

8/2

017

11/0

9/2

017

25/0

9/2

017

09/1

0/2

017

23/1

0/2

017

06/1

1/2

017

20/1

1/2

017

04/1

2/2

017

18/1

2/2

017

01/0

1/2

018

15/0

1/2

018

29/0

1/2

018

12/0

2/2

018

26/0

2/2

018

12/0

3/2

018

26/0

3/2

018

09/0

4/2

018

23/0

4/2

018

07/0

5/2

018

21/0

5/2

018

04/0

6/2

018

18/0

6/2

018

IWB FTSE AIM Index


Special Purpose Acquisition Companies

SPAC

A SPAC, which stands for Special Purpose Acquisition Company, is an investment vehicle without operations that is set up by a team of

promoters (Sponsors) to raise capital on the markets through an IPO. These resources are destined to fund the acquisition of a target

company. There are no specific constraints on the deal structure, which may be aggregation through contribution or merger (the so-

called Business Combination). Upon completion of the transaction, target’s shares will be listed;

Capital raising procedures are carried out by selling equity instruments (such as shares and/or warrants), issued by the vehicle, to

investors. Simultaneously, those securities are listed on a regulated market via IPO;

SPACs’ promoters, the so-called Sponsors, play a vital role for the company. Indeed, not only do they run the company itself, but they

are also required to invest part of their own wealth in equity instruments (often referred to as Special Shares)

The capital raised through IPO, which result from the sum of all investments made by ordinary shareholders, are deposited into an

Escrow account. Those resources, that cannot be used without shareholders’ consent, are strictly destined to fund either a Business

Combination or to payback investors that wish to whitdraw;

Each SPAC normally has a useful life of 24 months, which begins on the first day of trading, to complete a Business Combination. After

the 24° month mark («Deadline»), the SPAC begins the liquidation process, and all the resources available in the escrow account are

given back to investors;

In extraordinary circumstances, a six-months extension may be granted, thus postponing the Deadline to the 30° month. The previous

scenario may happen, for example, whether binding agreements have been signed;

The SPAC set-up offers interesting upsides to either investors and target companies. The former can benefit from the substantial

absence of management costs (which are covered by the sponsors), a 100% recovery of the investment (whether they decide to

redeem their shares), a fair liquidity and a certain degree of control on target selection (Business Combination must be approved by

shareholders). The target companies can also benefit from a transaction of this kind: with the vehicle already publically traded, it is

quicker to list new shares upon completion of the Business Combination. Furthermore, target shareholders may get to know in advance

their partners during the listing process;

A SPAC can be listed either on IVM (Investment Vehicles Market) or on AIM. There are currently 14 SPACs listed on the latter.

Source: company website


Guala Closures

Group

Guala Closures Group is one of the key international players in designing, manufacturing and selling plastic and aluminium bottle

caps for alcoholic and non-alcoholic beverages, wine, oil, vinegar and cosmetics, both in Italy and in the rest of the World. The Group,

founded in Italy in 1954, currently operates in 5 continents with 26 production plants. Guala has commercial subsidiaries in 100

countries and employes over 4000 employees worldwide;

Guala aims to become an international market leader of its sector, and plans to achieve a leading position through a non diversified

business model that only focuses on its core business;

In 2017, the Group reported net revenues of € 534M, EBITDA of € 103M and net income of € 4,7M;

Revenues, EBITDA and net income have all increased compared to 2016. In particoular, the net income jumps from being negative in

2016 (€ 3,6M loss) to being positive the following year.

Space4

On December 21, 2017, Space4, Space Holding’s fourth SPAC, started trading on IVM. Space4 aims to identify a mid-sized target

company that exemplifies Italy’s industrial excellence, which is also interested in opening up its capital to institutional investors through

an IPO. Targets are generally medium size, unlisted italian companies with strong international focus that need resources to fund, or

even speed up, their growth;

June 13, 2017 was the last day available to shareholders who wanted to redeem their shares to claim their rights. However, since the

before mentioned scenario resulted in a lack of redemptions, the deal can continue its path towards listing. Space 4 will invest € 130M in

the target company;

Timing is, arguably, the greatest benefit of going public via SPAC. The average IPO process may take up to 9 months, with top

management completely focused on getting the company market ready. Merging with an already publically traded SPAC means that it is

the vehicle itself that is responsible for the majority of the procedures as well as the related costs, thus not only speeding up the process,

but also allowing target’s management to keep their focus on company’s core operations.

Case study – Guala Closures Group and Space4 (1/2)

Sources: Guala Closures Group financial statements and Space4 company website


Guala Closures is one of the key international players that design

and manufacture plastic and aluminium bottle caps;

The Group operates in 5 continents with 26 production plants;

Guala Closures employes over 4000 people worldwide;

The Headquarter is located in Spinetta Marengo (AL).

The Company Key Financials

Target Company

SPAC

Financial Advisor of the SPAC

Net Revenues

€ 534,0M

EBITDA

€ 103,0M

Number of plants

26

Net Income

€ 4,7M

Deal structure

Involved parties Press releases

Case study – Guala Closures Group and Space4 (2/2)

Financial Advisor of the Target

Guala

Closures

Group

Space4

BUSINESS

COMBINATION

Space4 will acquire

circa 70% of target’s

shares

Equity value

€ 504M

Type of acquisition

Reverse merger

Total EV

€ 1.079M

NFP

€ 575M

Free Float

Around 70%

Audit Firm

Legal Advisor

Sources: Guala Closures Group financial statements and Space4 company website


Index















Nutkao

During July 2018, White Bridge has acquired 80% of Nutkao, a confectionery company specialized in the production and distribution of

spreadable & chocolate creams, valued at around € 160M. Founded in 1982 in Piobesi d’Alba (CN), Nutkao has grown steadily over the

years. Since the early 90s, the Company has started to export its products in Europe. Currently, Nutkao is arguably Nutella’s (Ferrero

Group’s world-famous spreadable cream) sole competitor. In 2017, Nutkao reported € 130M in revenues and EBITDA of € 15M. These

figures highlight improved operating performances if compared to 2016’s € 115,4M revenues and EBITDA of € 13,6M.

Prima Industrie

Prima Industrie leads a well-known group active in the development, production and distribution of laser systems for industrial

applications and machines for sheet metal processing, as well as industrial electronics and laser tecnologies. Recently, the BoD

approved the acquisition of 19% of a leading Chinese company, Cangzhou Lead Laser Technology Co, active in the production of 2D

laser machines for sheet metal cutting. Gianfranco Carbonato, Prima Industrie’s Chariman, said in a statment that the transaction, worth

about € 6,7M, «represents an important step for strengthening the Group in the Asian and Chinese market in particular».

Megadyne

Megadyne, a Turin-based company that manufactures power transmission belts and conveyor belts, recently completed the acquisition

of a Spanish company, Perhar Distribuciones, whose core business is manufacturing and selling modular belts and conveyor belts, with

key plants (that are also responsible for products’ distribution) in Valencia and Madrid. Megadyne is constantly trying to widen its product

range while breaking into new markets, through organic growth, as well as through strategic acquisitions with either revenue

enhancement or cost reduction synergies. The Perhar deal allowed Megadyne to consolidate its position in the power handling and

transmission systems sector.

M&A Deals in Piedmont, H1 2018 (1/3)

Sources: financial newspapers and company websites


Centrale del

Latte d'Italia

Grissinificio

Europa

Monviso, in May 2018 (four months after Cerea Partneaire’s takeover), has acquired Grissinificio Europa, a well-known company

founded in 1990 in Cuneo, specialized in the production of breadsticks and other bakery products. There is a double strategic rationale

behind this deal: Monviso aims to widen its products’ portfolio by adding even more baked goods and, at the same time, to strenghten its

competive placement on the marketplace.

Monviso Group

During January 2018, Pm & Partners sold the Monviso Group to Cerea Partenaire. The buyer has acquired 95% of the equity through

a subsidiary, Altabread, in a management buyout, with the remaining 5% going to Monviso’s CEO, Alessandro Manfredi Cusmano, and

five other top managers. Monviso, a Piedmont group specialized in the production of baked goods, rusks and breadsticks, has a turnover

of 36M and EBITDA of € 8M. Revenues are collected in Italy (60%) as well as abroad (40%).


Centrale del Latte d’Italia, Italy’s third biggest supplier of fresh and long-lasting milk, has sold in June its «Salads & Fruits» Business

Unit to Zerbinati, a company specialized in the creation of ready-to-eat salads, vegetables and ready-to-eat, fresh meals, based in

Casale Monferrato. The acquirer has agreed to let Centrale del Latta d’Italia sell, through its own channels, products under the Zerbinati

brand.



IWB

On March 26, Italian Wine Brand (IWB), winemaker company listed on AIM, acquired 100% of Pro.di.ve.’s capital, a start-up from Turin

that owns an online marketplace for wines, the Svinando Wine Club, with a customers base of over 100,000 people. Svinando has been

among the first platforms to break into the e-commerce of wine. From a strategic perspective, IWB aims to strengthen its leadership in a

sector with interesting growth prospects.

Fenera &

Partners S.G.R.

Fenera & Partners S.G.R., a newly founded, private asset management company, announced on June 19 the first closing of three

funds (private equity, private debt and private equity real estate) for a total of € 100M;

Fenera & Partners plans to diversify its portfolio by making investments in the following areas:

1. Alternative investments;

2. Private Equity;

3. Real Estate;

4. Other investments (equity).

The asset management company also collaborates with Reale Mutua Group, Banca Sella Holding and Banca Patrimoni & C.

Tecnomec-

canica Tecnomeccanica SpA, historical foundry of Novara specialized in the production of high precision dimensional die-cast aluminium

components, has recently completed the acquisition of Mea, a Moncalieri-based company that designs and manufactures molds for small

metal parts, from the Olsa Group. Following this acquisition, Tecnomeccanica will increase its turnover to around € 27M.


Equilibra In late June, Unilever, an Anglo-Dutch multinational conglomerate that owns over 400 brands ranging from food & beverage to hygiene

and household products, acquired 75% of Equilibra, a Turin-based healtcare & well being company. The Company, founded in 1987,

has a leading position over Italy’s food supplements market, but also has other business lines, such as products for skin and hair care.



Index














32SMEs Outlook - July 2018

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The Industrial Union of Turin and ADB do not provide any guarantee as to their accuracy or completeness;

The analyses and information provided are informative and any operational decisions that may be made are assumed by the User in full decision-

making autonomy and at their own exclusive risk and danger;

The analyses and indications provided are not necessarily a useful indicator of the future prospects of the variables analysed;

It is possible that the writer is directly and / or indirectly interested as an investor or otherwise to the performance of the securities analysed;

The complete or partial reproduction of any part of this document without the written consent of the Industrial Union of Turin and / or ADB is forbidden.

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