UK-listed private debt group ICG has financed the acquisition by private equity group The Riverside Company of Italian ice cream manufacturer Mec3.
ICG provided a €90 million package, comprising a unitranche debt facility of €80 million and a minority equity co-investment of €10 million. The financing package equates to a leverage multiple of more than 4x the company’s EBITDA.
The term of the debt is eight years.
ICG has also provided equity funding but will not get involved in the management of the business.
ICG’s equity co-investment, and the clear implication it believes in the future growth of the company, worked in its favour when Riverside and its advisors came to choose a debt financing solution, with several banks having tabled traditional senior plus mezzanine packages.
“[It gives] some added comfort to the sponsor that the interests are more aligned between the debt and equity,” explained Luigi Bartone, head of Italy for ICG.
Another decisive factor was that ICG was able to close the transaction more quickly than the banks also in talks with Riverside. “It was very important Riverside was able to commit quickly,” explained Bartone.
ICG’s investment was made from ICG Europe Fund V, which held a final close at €2.5 billion last January. The Mec3 deal takes the fund to 52 percent invested.
Mec3 has grown significantly in the last 10 years, both in Italy and in the rest of the world. It has benefitted from the increasing popularity of iced snacks and in particular of healthier and higher-quality artisanal options like gelato, ICG said. Sales grew from approximately €20 million in 2002 to €100 million in 2013.