Good morning, dealmakers. MK Flynn here with today’s Wire.
On PE Hub and PE Hub Europe this morning, we’ve got some fun stories for foodies and pet lovers. And over at Private Equity International, Orlando Bravo weighs in on his firm’s culture.
Buon appetite. Investindustrial said earlier today that it has agreed to acquire a 52 percent stake in Eataly, the Italian marketplace chain, for roughly $200 million. Existing shareholders Eatinvest, the Baffigo/Miroglio family and Clubitaly will own the rest of the company.
Eataly, headquartered in Alba, promotes and sells food ‘Made in Italy,’ reports PE Hub Europe’s David Wansboro. It has been in operation for almost 20 years and has locations globally.
Investindustrial’s investment will allow Eataly to retire net financial debt and free up capital for the group’s global expansion plans. Eataly will shortly announce a new CEO, with incumbent Nicola Farinetti becoming chairman.
“The collaboration between Investindustrial, the Farinetti family, the Baffigo/Miroglio family and Clubitaly is focused on supporting Eataly’s next stage of growth, preserving its unique DNA and maintaining its profile of sustainability, supply chain control and integrity,” said Andrea Bonomi, chairman of Investindustrial’s advisory board, in a statement.
Investindustrial is a Luxembourg-based group of independently managed investment, holding and advisory companies with approximately $11 billion of raised fund capital. The firm was founded in 1990 and looks to take controlling positions in predominantly Southern European medium-sized businesses.
The firm has invested roughly $2.5 billion in the food sector and has several Italian companies within its portfolio. These companies include Doria, a producer of Italian food and beverages, Italcanditi, an ingredients company and Dispensa Emilia, a restaurant chain.
And, if you haven’t already, now’s a good time to register for PE Hub Europe and editor Craig McGlashan’s daily Dealflow newsletter.
Pandemic pets. Even before covid, pet ownership was on the rise in the US, and the pet care business was booming, as people have increasingly begun treating their dogs, cats and birds as family members.
The pandemic accelerated these trends. As people were forced to work from home during lockdowns, one in five US households added a new cat or dog into their home. According to a survey by the American Pet Products Association, more than 90 million US households currently own a pet. Last year, the pet care sector racked up $123.6 billion in sales, an industry milestone. Of that number, $50 billion was spent on pet food, accounting for about 40 percent of all sales within the industry.
It’s all catnip to the private equity firms investing in the sector, including L Catterton, CD&R, TPG and Freeman Spogli.
Staying the course. Many large private equity firms have gone public or sold a minority stake in themselves to GP stakes buyers over the last several years, but Thoma Bravo won’t be taking either route, reports Private Equity International’s Adam Le.
The tech-focused PE firm, which has offices in Chicago, London, Miami and San Francisco, won’t change its ownership structure by listing or by taking on a third-party investor because it doesn’t want to change its culture, co-founder Orlando Bravo told attendees at the IPEM conference in Cannes on Tuesday.
“We talk as a partnership all the time about this, [but] we like it as it is,” Bravo said. “Anything that could change the way we work internally and talk as a culture and collaborate, even if we make a lot of money [on] day one by doing so, anything that changes that, you have to think really, really hard about.”
Culture isn’t the most important thing for a private equity firm – it is the only thing, he added.
Bravo said there are three areas his firm focuses on: raising capital, convincing sellers to part with companies and improving those companies. Accepting outside capital into the management company of a firm introduces a fourth area of focus.
“How quickly are you growing for them? When are you going to go to market again? How big are the funds? How many products? You really start changing the way you think about adding value, and it could affect your relationship with your partners as well.”
For more, read Adam’s story here.
That’s all for today. Aaron Weitzman will write the Fri-yay edition of the Wire tomorrow, and I’ll be back with more on Monday.