06 January 2018 xPaper

Fedrigoni finds buyer to secure future

Bain Capital Private Equity has bought Italian paper group Fedrigoni to support its ambitions for global expansion.

Italian papermaker Fedrigoni has been acquired by one of the world’s largest private equity firms. Bain Capital Private Equity has agreed to pay an unconfirmed €650 million for the Verona headquartered producer of high quality papers.

The Italian business was founded in 1888 and has remained in family hands since then. With this deal the Fedrigoni family will retain a 10% share in the business. Today it producers 470,000 tonnes of paper a year with revenues of €1.1 billion. It employs 2,700 and generates an Ebitda of €140 million. The majority comes from paper making across 14 machines in nine sites in Italy, two in Spain and two in Brazil. Around 40% of revenue comes from converting these papers into label stock with 11% of sales coming from security papers including bank note papers and security threads.

It has suffered the loss of two important banknote customers in the last year. Firstly the European Central Bank has shifted production of euro notes from Italy to France. Secondly the Indian government has decided to produce its own banknote papers rather than import them. However, the gain of a number of other orders has offset the loss of revenue.

In addition to the production sites, Fedrigoni has sales offices in key markets, including the UK where a head office in Northamptonshire is supported by a Clerkenwell sales office.

Bain Capital Private Equity intends to expand its new investment. “We believe Fedrigoni has the potential for grow significantly, both organically and through acquisitions and look forward to partnering with the management team to accelerate this as we have done in several other industrial global businesses.”

Fedrigoni has been seeking additional capital to fund international expansion for some years, being linked to a number of private equity businesses and leading to plans for an IPO which was abandoned due to adverse market conditions in 2014. “Today Fedrigoni is an international player requiring additional resources to support its global ambitions,” said Alessandro Fedrigoni, chairman of Fedrigoni. “We have found in Bain Capital the ideal investor to drive Fedrigoni into its next stage of global development given its deep industrial expertise, operational skills and its worldwide pool of resources.”

The deal continues an interest in European expansion for Bain Capital, with a number of deals in recent years. And it is a second with a graphic arts flavour. The company has backed North American paper merchant, facilities management and consumables distributor Veritiv.

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Fedrigoni studio

Fedrigoni studio

a href="http://bit.ly/2CT4Uek" target="_new">Bain Capital has bought Italian papermaker Fedrigoni paving the way for acquisitions and further overseas expansion as the company seeks opportunities for its designer papers, security and label papers. The deal ends a search for a way to fund this expansion.

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