CVC Capital Partners to buy control of Pasubio group, Italy’s leader in leather products for the automotive industry

CVC Capital Partners announced that its CVC Fund VI has agreed to acquire Pasubio group, the leading Italian producer of high quality leather products for the automotive industry with over 60 years of history.

The transaction was completed with a valuation of approximately 285 million euros, MF Milano Finanza writes today, based on expected 2017 revenues of 330 million euros and an ebitda of 35 million, after the group generated 292 million euros in revenues in 2016 (+ 20% from 2015) and 30 million in ebitda (+ 30%). The operation was funded by a pool of banks that saw BnpParibas, Intesa Sanpaolo and Unicredit among the major players, who made funds available for more than 100 million.

More in detail, CVC, led in Italy by Giampiero Mazza, has bought 100% of the capital of Mario Pretto Finanziaria, the holding of the Pretto family which owns Conceria Pasubio and Arzignanese. The Pretto family will reinvest in the business for over 10% and will retain management responsibility. The objective of the operation for CVC is to support an important international expansion program, which also includes acquisitions, some of which are already under advanced discussion.

The group of Arzignano (Vicenza), led by the brothers Alberto and Luca Pretto, has established itself as the undisputed leader in supplying leather solutions for the automotive industry with a high level of quality, innovation and operational excellence.

Over 80% of the business is generated overseas, providing leather solutions for the interior of the most important luxury car brands. Major customers include the Jaguar Land Rover Group, the Volkswagen Group (Porsche, Lamborghini, Bentley and Skoda), the FCA (Maserati and Alfa Romeo), Bmw and Psa.

Pasubio operates throughout 6 facilities, of which 5 in Italy and one in Serbia, and 400 employees, controlling the entire production cycle, which includes tanning, selection, dyeing, finishing and cutting, producing more than 10 million square meters of leather per year.

In addition to the Pasubio group, the leading carmakers in the automotive market include the Canadian Eagle Ottawa, which was acquired in 2015 by Lear Corporation, Bader (Germany), Boxmark (Austria) and GST Leather (USA), which also owns Seton.

CVC was assisted in the due diligence by PwC and by Shearman & Sterling law firm. Further assistance was provided by Deutsche Bank, Clifford Chance, White & Case and McKinsey. The Pretto family was assisted by the financial advisor CP Advisors (led by Salvo Mazzotta e Marco Garro), who originated and managed the sales process, and by Studio Associato Corradi D’Incà. E&Y provided support in the accounting due diligence for the group. download attachment