Sir John Peace and Fabio Sbianchi, Octo Telematics‘ chairman and ceo repectively, signed a binding agreement to buy a 20% stake in the number one global provider of telematics for the auto insurance industry from actual controlling shareholder Renova Group (see here the press release).
Following this deal, Renova’s stake in the company will lower to 48.55% from 68.55%, while the management team’s stake will reach 25%, just a little less than the 26.5% owned by the Pamplona fund.
The deal aims at making Octo Telematics independent from Renova Group in order not to suffer of new US sanctions against Russia, as Renova is owned by Russian oligarch Viktor Vekselberg. Octo Telematics’ press release actually says that “The company is in direct contact with the relevant U.S. authorities and is confident that this transaction will address any concerns as to the independence of Octo Telematics from the Renova Group”.
For the same reasons in the last few days all members of the Renova Board of Directors resigned. See Josef Ackermann (former head of Deutsche Bank), Luca Cordero di Montezemolo (former Ferrari and Alitalia chairman), John Deutch (former head of US secret service CIA), Orit Gadiesh (Israel’s economist and former chairman of Bain & Co), Vladimir Kuznetsov and Alexey Moskov.
Renova had bought control of Octo Telematics in February 2014 from Italian private equity firm Charme and its co-investors Amadeus Capital Partners and Keensight Capital, while the management reinvested for a 5% (see here a previous post by BeBeez). Renova then sold part of its stake to Pamplona.
It is not clear now what it is going to happen with the ipo project as the company was said to list by next May on the Italian Stock Exchange (see here a previous post by BeBeez). Octo Telematics’ press release does not say anything on the issue while just one month ago Tamburi Investment partners (who in 2015 subscribed an 8 million euros convertible bond issued by the holding company owned by Octo Telematics’ management team) in its letter to shareholders said that Octo Telematics’ listing was quite close (see here a previous post by BeBeez).
Octo Telematics 239 million euros in consolidated revenues in 2017 with 117 millions in ebitda. That’s why its shareholders were said to aim at a 1.2 billion euros enterprise value. However its financial advisors (Mediobanca, Citi, Goldman Sachs, Barclays and Unicredit) were trying to limit the valuation around one billion euros or 8.5x ebitda, which would have brought Renova and Pamplona to cash in about 350 million euros.