Aquafil, a Bonazzi Group subsidiary that makes fibres for textile flooring, has raised €45 million in private equity funding from Hutton Collins. It is the first deal out of Hutton Collins’ third fund, which is capitalized with €600 million.
Hutton Collins,, has Hutton Collins, the preferred equity capital specialist, has completed a €45 million investment in Aquafil, the market-leading European producer of fibres for textile flooring. Aquafil employs 1,800 worldwide and had revenues of €380.7 million in 2008. This is the second investment Hutton Collins has made in Italy and is one of the largest private equity transactions at local level since the beginning of 2009. Aquafil is the first investment in Hutton Collins Fund III of approximately €600m
Aquafil, founded in 1969 in Arco di Trento (Italy), is a dominant player in the Nylon 6 synthetic fibre market with a specific focus on the manufacture of fibres for textile flooring. Aquafil also has a significant presence in the engineering plastics and special textile fibres sectors and has production plants in Italy, Slovenia, Croatia, USA and Asia. The company has consistently increased global market share across all its business divisions, and is now the second largest player globally, as well as being the European market leader with c. 34% of market share.
Hutton Collins’ capital injection, by means of a preferred equity instrument, will accelerate the company’s growth strategy which is focused on the development of Econyl, an environmentally sustainable product, and expansion into the Asian market. The Bonazzi Group, which currently owns Aquafil, will retain a majority holding and overall control of the company.
Hutton Collins specialises in preferred equity capital (PEC), a form of equity finance that gives the PEC investor priority over ordinary equity holders in a company’s capital structure. PEC is less dilutive than traditional private equity; PEC investors usually take minority positions allowing management more operational freedom.
Giulio Bonazzi, CEO of Aquafil commented:
“Aquafil completed the first half of 2009 with good growth despite the difficult economic environment. The Bonazzi Group decided to partner with Hutton Collins to ensure we had the necessary resources to continue the company’s successful growth, to capitalise on our leadership of the European market and develop further in the US and Asia. In particular, we intend to accelerate investment in the field of sustainable products (Econyl) and in Asia, where the construction of a new plant will soon be completed. Recycled products and the development of Asian markets are the most important strategic projects for Aquafil in the near future.”
Graham Hutton, Co-founder, Hutton Collins commented:
“As part of the investment strategy of our latest fund we intend to focus on the Italian market in a more systematic way. We believe our model fits very well with the characteristics of the Italian entrepreneurial system in that we will target, for the most part, minority partnership positions in the companies in which we will invest. The significant number of high quality businesses we have analysed in the last 12 months, cullminating in our investment in Aquafil, has reinforced our determination to focus on the Italian market.”
Mauro Moretti, partner of Hutton Collins, commented:
“We are delighted to support the development of Aquafil, which is a typical example of an Italian company that has managed to excel in its niche market. Hutton Collins’ investment strategy focuses on supporting entrepreneurs and management teams in successfully developing their businesses, and Aquafil represents an ideal opportunity.”
Legal assistance in the operation was provided by Bonelli Erede Pappalardo on behalf of Hutton Collins, and Freshfields on behalf of Aquafil. Clifford Chance and Paolo Nicolai acted as tax advisers, while Bain & Co. acted as business advisor.
Hutton Collins provides preferred equity capital to high quality businesses in the UK and continental Europe. Established in 2002, we manage over €1.4 billion of dedicated funds on behalf of leading global financial institutions. To date, Hutton Collins has completed 22 investment transactions in 21 companies, including one in Italy, the Elettra Group, which operates in electricity generation and the development of projects in renewable energy.