A consortium made by Advent International, Bain capital and Clessidra sgr signed last Friday June 19 an agreement with shareholders of ‘Istituto Centrale delle Banche Popolari (Icbpi) Italy’s payment services bank aiming at buying an 85.7% stake in the bank’s capital (download herethe press release by Icbpi’s shareholders and the one by the private equity consortium).
More in detail, Icbpi’s shareholders which are a group of Italian small and mid-size banks, signed for selling their stakesin Icbpi’s capital to Mercury Italy srl, a newco owned by Advent (42.5%), Bain (42.,5%) and Clessidra (15%). The consortium started exclusive talks about three weeks ago with Icbpi’s shareholders beating a competitor consortium made by CVC Capital Partners and Permira (see here a previous post by BeBeez).
Icbpi counts more than 1,900 employees and in 2014 reahce 670 million euros in revenues, with a 195 million euros ebitda and a 95 million euros net profit. The deal price will be fixed in the next future depending on the structure of the deal that will be chosen. Actually the private equity consortium has made two differents bids. A first one gives Icbpi an enterprise value of 2.15 billion euros and include a 50% leverage, while the second gives Icbpi a 2 billion euros EV but is a full equity bid, that is to say that the acquisition will be financed with just 425 million euros of debt.
Bank of Italy’s opinion will be crucial in order to choos the final deal structure as it is reasonable to think that the supervisory authority would prefer Icbpi will be less laded with debt after the deal.
CVC-Permira consortium had instead valued Icbpi 2.05 billion euros and was ready to finance the deal both with a 50% leverage or with just 300 million euros of debt. A difference in favour of the winning consortium was made by a higher valuation of CartaSi and HelpLine minorites (75 millions by Advent, bain and Clessidra versus 50 millions by CVC-Permira),
The consideration also includes an additional component in the form of an earn-out linked to proceeds that may be paid by Visa Europe to CartaSì. for an amount which cannot be quantified at present.
It is expected that some actual shareholders will retain a 7.9% stake in the share capital of Icbpi, shared as follow; Credito Valtellinese 2%, Banco Popolare and Popolare Emilia 1.5% each, Popolare Cividale 0.7%, Ubi Banca and Popolare Milano 1% each and Banca Sella 0.2%. These banks will enter into a shareholders’ agreement with Mercury Italy providing governance as well as mechanics regulating transfer of the ICBPI shares provisions.
Popolare Vicenza, Veneto Banca, Banca Carige and Iccrea Holding will exit from corporate capital entirely upon completion, while the remaining 6% stake owned by other banks will be soon acquired by the private equity consortium.
For the deal Icbpi’s shareholders have been advised by Equita sim and Mediobanca and by studio Lombardi Molinari Segni law firm. The private equity consortium has been advised by Rothschild, Hsbc and Vitale&Co as for financial issue, while Bonelli Erede Pappalardo, studio Tremonti, Studio Carbonetti, Carlo Pavesi and Weil, Gotshal & Manges were the legal advisors. Strategic advisors to the funds were Franco Bernabè, Boston Consulting Group, First Annapolis and PriceWaterhouseCoopers, while Studio Pirola and Studio Romagnoli, Vitali, Piccardi advised the funds on fiscal issues. Finally Community Group was the communication advisor.