Good morning Eurohubsters, Nina Lindholm here with the final Dealflow of the year.
Considering this is the last time we’re writing to you this year; I thought it would be appropriate to look back at some highlights from 2022. One must be the launch of PE Hub Europe this summer. We have published a lot of content since, so let’s look back at some of my favourite stories.
Correct label. In early August, Craig McGlashan wrote about BC Partners entering a joint ownership agreement with Bain Capital for Fedrigoni, a producer of self-adhesive labels.
We got to hear both sides of the story, as Craig caught up with Stefano Ferraresi, partner and head of the industrial sector in Europe and the Italian market for BC Partners, and Ivano Sessa, a managing director and European co-head of the industrial vertical at Bain Capital.
“It is a very small cost item overall compared to the value of the products they package, but it’s incredibly important for the perception of the customer,” Ferraresi said. “That’s where you can position yourself and develop an attractive business if you can provide the right quality and service. You have some good pricing power and can achieve good profitability in these segments.
“Luxury packaging is generally more insulated from recessions than many other packaging segments.”
Bain originally acquired Fedrigoni in 2017. The deal made alongside BC was a reinvestment.
“Believe it or not, but in the world of paper and labels there are actually new technologies with great growth potential,” Sessa told Craig.
You can read Craig’s interview with Ferraresi here, and Sessa’s perspective on the deal is available here.
Tasty deal. Whether I like the next one purely because I like pasta shall remain a mystery. In early October, I spoke with Investindustrial’s managing principal, Antonio Gatti, and senior principal Carl Nauckhoff about Italian marketplace chain Eataly, which Investindustrial acquired a 52 percent stake in for €200 million.
“For the moment, Eataly is only one format, but the plan is to make it nimbler,” Gatti told me. “For example, Eataly in airports works extremely well. But there’s only one Eataly at an airport – in Rome.”
Investindustrial is not stopping at airports. “Eataly can be sliced, maintaining the brand, to adapt to every possible type of location – even small corners,” he added.
Eataly was originally 60 percent retail and 40 percent restaurant, but the restaurant part will become more dominant, according to Gatti.
You can learn more about Investindustrial’s plans for Eataly by reading my full interview with Gatti and Nauckhoff here.
On the ball. While I can’t claim to know much about football, I can still appreciate Craig’s story on private equity’s growing interest in the sport.
While some country’s rules make it difficult for private equity firms to get into football ownership, there are still other ways to profit from the sport, such as TV rights deals.
One of the deals covered in the story is an example of just that. Sixth Street bought a 10 percent stake of Barcelona’s domestic league TV rights for €207.5 million in June, then following up with an additional 15 percent stake in July.
Some firms have gone for more conventional ownership models like RedBird Capital Partners’ purchase of Italy’s AC Milan.
One private equity firm, speaking off the record, told Craig it has a “thematic conviction in the best global sports brands continuing to strengthen their businesses as consumer behaviour shifts allowing for more global, year-round fan engagement”.
The story is a must-read for any football fan, but it is interesting regardless of your level of knowledge. You can read Craig’s full story here.
That’s all from me, both for the week and the year. PE Hub Europe will quiet down for the holidays, as the PEI offices will be closed. The first Dealflow of 2023 will be on Tuesday, 3 January.
Happy holidays, I hope you all have a good break!