Carlyle Group sells final stake in China Pacific

February 2013 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

In a deal which bucked the recent trend of private equity (PE) firms retrenching from the Italian market, CVC Capital Partners announced in January that it had agreed to purchase Italian corporate intelligence and ratings agency Cerved Group from rivals Bain Capital and Clessidra SGR S.p.A. in a deal worth $1.49bn.

Luxembourg-based CVC beat out competition from rival firms Permira and BC Partners to complete the deal, which is subject to competition clearance. Due to uncertainties surrounding the prolonged US ‘fiscal cliff’ negotiations Bain Capital was keen to complete the transaction before the end of the year. Accordingly, the deal was agreed on 31 December 2012. Earlier that month Cerved suspended a high yield bond offering as Bain and Clessidra pursued a sale of the group.

Cerved Group, which employs over 1000 staff, was formed over three years between 2008 and 2011 as Bain Capital and Clessidra purchased non-core assets from a group of Italian banks including Cerved BI, Lince, Centerale dei Bilanci, Databank, Finservice, Jupiter and Consit. The two PE firms paid €530m for the carved-out group, considerably less than the €800m to €850m originally touted.

The company is the leading provider of business credit information, namely financial reports and details of board members, shareholders and credit histories. It enjoys a 30,000 strong client base, which includes 90 percent of Italian banks and over 80 percent of Italy’s top 1000 companies. In 2012 Cerved generated revenues of €292m, a 9 percent increase from 2011. Since the group was formed in 2008 it has increased its earnings before interest, tax, depreciation and amortisation (EBITDA) from around €100m to €140m. The financial crisis has caused many banks and businesses to seek out information on solvency related issues in order to reduce risk; consequently the demand for Cerved’s services has risen sharply.

As part of the company’s strategy going forward, Cerved now plans to expand its business outside of its core Italian market. “I am excited to work with CVC in the next phase of the development of Cerved,” said Gianandrea De Bernardis, Cerved’s chief executive. “Our plan is to continue pursuing the growth of the business both organically and through acquisitions consistently with what we have done in the past few years. This is in line with our strategy of improving quality of services and of innovating our offer to always better serve our customers in this mission critical area.”

Bain Capital and Clessidra are expected to earn around 2.7 times their initial investment from the sale. Luca Bassi, managing director at Bain, said “we are delighted to have supported Gianandrea De Bernardis and his management team in the carve-out of Cerved from a group of Italian banks, its integration with Lince and Honyvem and the creation of the leading Italian business information provider.”

CVC is investing around €350m to finance the deal, as well as using approximately €780m of debt. Additional funding for the deal will be provided by Credit Suisse, Deutsche Bank and HSBC. Giampiero Mazza, head of CVC in Italy, stated “Cerved is a high quality business that has demonstrated the ability to grow through a most challenging economic environment. Under Bain Capital and Clessidra, Gianandrea and his team did a fantastic job in transitioning the company from a bank-owned captive provider of credit information into an independent leader across the banking and corporate markets. We look forward to support the next phase of Cerved’s growth into adjacent markets as well as internationally”.

CVC was advised on the deal by Deutsche Bank, Lazard, Eidos Partners, Chiomenti, Kirkland & Ellis, Bain and Co, Ernst & Young and Facchini Rossi Scarioni. Bain Capital and Clessidra were advised by HSBC, Banca Intesa, Gattai Minoli & Partners, Kirkland & Ellis, PwC, McKinsey & Co, Capital Market Initiatives, Pirola Pennuto, Zei & Associati and Vitali Romagnoli Piccardi e Associati.

Richard Summerfield