With Texas Pacific Group (TPG) currently sniffing around British Vita, the UK foam rubber maker, chances are the firm's new European operating partner Vincenzo Morelli might be quickly called upon to demonstrate the turnaround skills he has honed over 25 years as a senior industry executive and private equity professional.
In its last trading update in December, the target company revealed that rising raw material costs were affecting its profits margins. Just the kind of distress signal that the likes of Morelli relish, though in this particular case it should not be assumed that the company's troubles make it a bargain buy: TPG's most recent £624 million (€905 million; $1.2 billion) offer was rejected by British Vita as too low.
Even if that particular deal flatlines, Morelli still looks like he has come to the right place at the right time. Following a three-year spell as a senior adviser to Clayton, Dubilier & Rice between 2000 and 2002, Morelli has spent the last two years heading up the European equity sponsors group at turnaround consultants Alvarez & Marsal.
At A&M, he successfully co-ordinated what many observers saw as a seminal restructuring in the Italian market, when creditors of port machinery firm Fantuzzi agreed to extend the maturity of a bond payment to avoid a default and almost certain liquidation. TPG was among the observers applauding from the sidelines.
According to a source close to the firm, its partners “have known him [Morelli] for many years” and “respect his ability”. As a result of which, Morelli was a natural successor to former TPG European operations partner Cornel Riklin, who left the firm at the end of last year to become full-time chief executive at TPG portfolio company Findexa, the Norwegian directories group.
As a partner, Morelli assumes the exalted status that he did not achieve at CD&R. He will serve as the firm's sole operating partner in Europe. In the US, the firm has three such operationally minded specialists: Richard Boyce, Jim Williams and Kevin Burns.
A London-based executive search professional tells Private Equity International that there has been an increase recently in the number of private equity firms “on the lookout” for portfolio management specialists such as Morelli or James Quella, who last year moved from CSFB Private Equity to The Blackstone Group. Watch this space.
PERMIRA HIRES SENIOR RBS PRO, PROMOTES THREE
Pan-European private equity firm Permira has promoted Carlos Mallo, Sonja Mikic and Cheryl Potter to partners in its Spanish, German and UK offices respectively. At the same time, the firm has announced the appointment of Rory Cullinan, former head of equity finance at Royal Bank of Scotland (RBS). Cullinan joins the London office from RBS, where he was head of equity finance. Previously he had been a founding partner of investment capital firm Verdoso and the COO and CFO of Pembridge Investments, having begun his career at Citibank.
3I BUYOUT TEAM HIRES GIDDINS
London-listed 3i has appointed Alan Giddins as a director within its European buyout business. 39-yearold Giddins joins from SG Corporate & Investment Banking (SGCIB), the corporate and investment banking arm of the Société Générale Group. At SGCIB, Giddins was a managing director and most recently head of M&A within the transport and support services group. Giddins joined SGCIB in 1992 from KPMG, where he began his career in 1987. His experience covers both public and private markets. Giddins advised ferry company P&O on the demerger of its cruise division, and has worked with private equity firms on both the buy and sell side. At 3i, ([A-z]+)-based Giddins will focus on support services and transport and logistics, reporting directly to Jonathan Russell, head of buyouts at 3i.
WELLINGTON HIRES EX-BENCHMARK PRO
Veteran European venture capitalist Eric Archambeau has joined early stage investment firm Wellington Partners as a general partner. A native of France, Archambeau's work will focus on internet services, enterprise software and semiconductor opportunities. He is also expected to assist with portfolio companies looking to expand into the US market. According to a press release, Archambeau founded his first company in Silicon Valley in 1982 and spent the 1990s developing a software business which was bought by e. Piphany in 1999. Archambeau spent two years as a general partner at Atlas Venture in California, and in 2000 accepted a position running the European business of US venture capitalist Benchmark Capital. He left Benchmark two years later.
LONDON HIRE FOR PAUL HASTINGS
Former Dewey Ballantine lawyer Geza Toth-Feher has joined the corporate department of Paul, Hastings, Janofsky & Walker's (Paul Hastings) London office. Toth-Feher specialises in public mergers and acquisitions, acquisition finance and private equity investments, and has frequently acted on behalf of US financial institutions and investment funds making investments into Europe. With particular expertise in German transactions, Toth-Feher has advised the likes of CSFB, Chase Manhattan Bank and Lehman Brothers. He is also a co-founder of CB Equity Partners, a specialist finance advisory firm in Germany.
ICG CO-FOUNDER TO RETIRE IN APRIL
Tom Bartlam, the managing director of publicly listed UK mezzanine provider ICG, has announced his decision to retire in April, following the announcement of ICG's end of year results. 57-year-old Bartlam cofounded the group in 1989 alongside fellow managing director Tom Attwood and will remain on the board as a non-executive director.