Consumer Market Italy M&A Trends | 2018
Consumer Market
Italy | M&A Trends | 2018
it
Index
Methodology & Glossary
4
Executive Summary
5
At a glance
6
Overview on Consumer multiples
9
Food
11
Beverages
16
Personal Care & Cosmetics
18
Fashion & Luxury
20
Furniture & Design
24
Specialty Retail
27
Leisure
30
Deals by geography
32
Value Creation in Deals
35
Data Analytics in Deals
37
Our 2018 Consumer credentials
38
Italian Consumer Deals Team
39
Contacts
40
Methodology
Reported deals have been sourced from
.
Deals have been selected based on the date of announcement. Revenues and EBITDA have been sourced from the latest financial statements available on public databases (AIDA, Orbis, Cerved) and refer to the individual accounts (unconsolidated) of the target entity, except where otherwise stated. Revenues and EBITDA are available for 83% and 77% of the reported deals respectively. Deal value is not indicated since in most cases the data are not publicly available.
Glossary
Domestic deals are those with both Italian acquirer and target. Inbound deals involve a foreign acquirer and an Italian target. Outbound deals involve an Italian acquirer and a foreign target.
Financial investors include Private Equity, SPAC (listed Special Purpose Acquisition Company), family offices, financial holdings and acquisitions made by Private Equity portfolio companies. Strategic investors include corporates, private investors and buy-backs.
North-West includes Valle d'Aosta, Liguria, Lombardy, Piedmont. North-East includes Friuli-Venezia-Giulia, Trentino-Alto Adige, Veneto. Centre includes Emilia-Romagna, Lazio, Marche, Tuscany, Umbria. South & Islands include Abruzzo, Molise, Basilicata, Calabria, Campania, Apulia, Sardinia, Sicily.
4 Retail and Consumer M&A Trends | 2018
Executive Summary
by Emanuela Petten?
Despite the fear of a slowdown in M&A activity, more than 200 deals (including 5 IPOs) have been announced in the Consumer segment in 2018 (vs. 178 in 2017)
The Italian M&A Consumer arena hosted 202 transactions in 2018 (+13% vs. last year), with Food largely dominating in terms of number of deals (60 - almost stable vs. 2017). Financial investors were particularly active with 91 deals announced in 2018 (vs. 54 in 2017), but with a lower average size compared to 2017 (average Target revenues of 79m in 2018 vs. 115m in 2017). Corporate buyers were more focused on the domestic market, leading to a decrease in the number of Outbound transactions (20 in 2018 vs. 27 in 2017). 5 large cross border corporate deals have been announced in 2018 including:
? the acquisition of Nestle's US confectionery business by Ferrero for a deal value of 2.3bn;
? the public tender offer made Richemont to buy a 75% share in Yoox Net-a-Porter Group delisting the company (2.7bn investment and 3.4bn EV);
? the acquisition of Gianni Versace by Capri Holdings (Micheal Kors) for 1.8bn;
? the 70% investment by Snaitech in Playtech at an EV of 0.8bn (for 100%);
? and the acquisition of the US Mars Drinks by Lavazza.
The main deals announced by Private Equity houses included:
? the acquisition of Forno d'Asolo (frozen food) by BC Partners;
? the 41% investment by FSI in the fashion brand Missoni;
? the creation of the newco Design Holding where Investindustrial and Carlyle contributed their furniture and design portfolio companies Flos, B&B Italia and Louis Poulsen (acquired in July 2018);
? the investments of OpCapita in the pizzeria chain RossoPomodoro and of Alpha in Calligaris (producer of high-end furniture).
Number of deals
70 60
60 57 50 40 30 20 10
43 34
48 35
29 18
23 15
11 7
0 Food Fashion Specialty Furniture Beverages Personal
& Luxury retail & design
care
& leisure
& cosmetics
Despite clouds of recession, significant volumes of activity are expected also in 2019, at least in the first semester, with a few macro-trends driving market growth across all segments:
? Sustainability is by far the most relevant and pervasive trend impacting the overall industry from Food, Beverages and Cosmetics (fresh, organic/ bio, cruelty free) to Fashion (declining use of furs, inclusivity, "made in"), Furniture & Design (waste recycle) and also adjacent segments like Packaging;
? Innovation will be the key to attracting new customers, particularly Millennials and Gen Z. Brands have realised that, to extend their product portfolio, investments in niche innovative companies are an easier alternative to internal development. This trend is currently driving large corporates' investment in both emerging Fashion brands and niche, highly innovative Cosmetics companies;
? Value for money continues to be a mantra not only for final customers but also for B2B producers working with fashion and luxury brands;
? Lifestyle changes such as the increasing number of singles and working women is leading to a revolution in the most traditional segment of this industry (Food), with expectation of higher consumption of ready meals, frozen food and a boost in food delivery. On the other side, ageing and growing attention to health and personal care will polarise personal purchases vs. premium products;
? Immediacy ? E-commerce will be the sale channel with the highest growth potential across all segments. After Fashion and Food Delivery, Food, Cosmetics and Design have an almost untapped potential to discover.
With this report we aim to provide an outlook on the deals dynamics in the Consumer space.
We sincerely hope this can be a valuable read and look
forward to 2019.
Emanuela Petten?
PwC Deals ? Transaction Services Partner Italy Consumer & Market Deals Leader
FY 17
FY 18
5
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