M&A

DoValue conquers Gardant: 'Pole in impaired loans'

The leading entity in Italy and Southern Europe in debt collection for third parties is born. 230 million cash operation, maxi financing from a pool of ten banks

by Luca Davi

7 June 2024

3' min read

Key points

L’operazione
Rise and quotas
Governance structure
The rationale for the operation
Next steps

3' min read

After weeks of intense negotiations, the signature has arrived: doValue merges with Gardant. Thus was born the leading entity in Italy and Southern Europe in debt collection for third parties, with over EUR 160 billion under management, about 20% of the Italian market, expected revenues of over EUR 600 million and an EBITDA of over EUR 200 million.

After Ion's move on Prelios, the credit management world takes another decisive step towards consolidation. It does so through the two realities that last March signed a non-binding agreement in view of a possible aggregation, confirming the rumours that had been chasing each other for months. Yesterday evening, as Il Sole 24Ore can anticipate, the signing of the binding agreement, which will see the presence in the new conglomerate of the shareholders of both companies. A deal that, a detail not to be overlooked, hinges on broad support from the banks, confirming the strategic value of the operation. And, perhaps, of further future developments.

L’operazione

In detail, to obtain 100% of Gardant, doValue and its shareholders will pay 230 million cash (of which 50 million will cover the target company's debt) to Elliott and Gardant's other shareholders, who will at the same time receive 20% of the new operator's capital. The financing is a decisive step: a five-year 500 million loan from a pool of 10 Italian and foreign banks and a three-year 70 million revolving credit line are planned. The 'package' will be used to finance the acquisition of the target company, refinance doValue's bonds to 2025, repay the senior notes and support the repayment of the debt to 2026 also thanks to a EUR 100 million liquidity buffer.

Rise and quotas

The endowment will finance the EUR 150 million capital increase needed to bring in new shareholders and strengthen the structure: Fortress, Bain and Elliott and other Gardant shareholders will subscribe pro-quota for a total amount of approximately EUR 82.5 million. At the end of the increase - which is guaranteed by Mediobanca, Unicredit, Intesa Sanpaolo, and Banca Akros - Fortress will be diluted in the shareholding structure to 23 per cent (from the current 27 per cent), Elliott (to whom two seats on the new board of directors, which will expand to 13 members, will go) will have about 18 per cent, and Bain will drop from 14 to 11 per cent.

The governance structure

Confirmed under the banner of continuity, as expected, is the governance structure: Manuela Franchi and Alessandro Rivera, currently at the top of doValue, will respectively hold the positions of CEO and president of the new group; Mirko Briozzo, until now number one of Gardant, will continue in the current groove, holding the position of country manager for Italy. "In a market phase in which operators are exiting, we instead invest with the commitment of all the partners and give life to a leading company in Europe in the credit management sector," Manuela Franchi told Il Sole 24Ore. "We are happy to welcome Gardant's team into the group, with which we share objectives and culture.

The rationale for the operation

The industrial rationale of the transaction is clear. DoValue is the leading operator in Southern Europe in credit and real estate management services for banks and investors, with approximately EUR 116 billion in assets under management in Italy, Spain, Portugal, Greece and Cyprus. The group had long been looking for a solution to make its business model and debt more sustainable, in a phase of general market contraction. Gardant, for its part, is mainly concentrated in Italy, thanks also to a series of partnerships with a number of large Italian banks (Bper and BancoBpm in primis), is active in Utp and has a Sgr with EUR 500 million in funds under management. The possible synergies are therefore evident, estimated at 15 million when fully operational, with leverage expected to be 2x in 2025 and 1.5x in 2026, revenues of between 605 and 625 million euro in 2026 when EBITDA is expected to be between 240 and 255 million.

Next steps

The transaction is expected to be completed by the fourth quarter of the year, once all authorisations have been obtained. Looking forward, 'we see synergies on the master and special servicing side, as well as on the Sgr side, with the expansion of Gardant Investor outside Italy,' Franchi adds. 'We want to seize other market opportunities,' the manager concludes. 'Thanks to the liquidity facility we have, we can move by looking at other tactical operations, and consolidate our presence in other markets, such as Spain, where we are already operating and tend to be more fragmented.'

In the transaction, Jefferies acted as doValue's sole financial advisor for the acquisition, while doValue's legal advice was provided by BonelliErede and White&Case. PwC provided assistance with financial due diligence, tax and IT operations.