De Agostini joins Palamon with a stake in Italian loan provider

Italian conglomerate De Agostini has taken a minority stake in Palamon Capital Partners-backed loan provider Sigla Luxembourg, as the relatively undeveloped personal credit market in Italy continues to grow.

Italian conglomerate De Agostini has taken a 26.75 percent stake in Italian financial services company Sigla Luxembourg from its co-founder Ettore Riello for €38 million ($52 million).

European mid-market buyout firm Palamon Capital Partners owns 65 percent of Sigla.

The provider of unsecured consumer debt has grown its loan book from zero to €200 million since Palamon took over the company in 2005. Palamon did not take over Sigla existing loan book at the time. 

The company’s management owns the remaining 8.25 percent stake.  De Agostini will also provide growth equity to the company. Merrill Lynch provided the company with €150 million of receivables financing in July 2006.

Palamon’s spokesman said: “The credit industry is relatively undeveloped across Europe. With the introduction of professionals from the UK the growth in Sigla’s loan book has shown there is growing demand in Italy for this type of investment.” The company targets riskworthy consumers with super-prime credit ratings, he said.

According to figures published by Palamon in 2005, the credit market in Italy was growing by 14 percent a year although from a relatively low base in comparison to the United States and the United Kingdom.   
Italian investments make up 15 percent of Palamon’s portfolio.  The buyout firm specialises in consumer credit with stakes in Si Collection, an Italian debt recovery company, SAV Credit, a UK credit card company and Nordax Finans, a Nordic personal loans provider.