Target Information

Entangled Capital and Capital Dynamics have successfully acquired Sicatef in Treviglio and Luxenia Umbro Tiberina in Perugia through their joint venture, Alphial. Both companies have been pivotal players in the production and commercialization of tubular glass ampoules for over 90 years. This acquisition positions the newly formed group as the largest European manufacturer of glass ampoules, serving the pharmaceutical and cosmetic industries with an annual production capacity exceeding 1.5 billion units.

Sicatef and Luxenia Umbro Tiberina have established themselves as leaders in both domestic and international markets, supplying reputable pharmaceutical groups. Their success can be attributed to a combination of high-level expertise, quality raw materials, and advanced automated production processes, ensuring exceptional product quality. Together, these companies generate more than €13 million in revenue, with an EBITDA margin surpassing 20%.

Industry Overview

The pharmaceutical and cosmetic packaging industry in Italy has been experiencing substantial growth, driven by increased demand for high-quality packaging solutions. With a focus on sustainability and innovation, companies in this sector are adapting to meet the evolving needs of clients, as regulatory environments become stricter and consumer preferences shift towards eco-friendly products.

Italy’s rich history in pharmaceutical manufacturing has solidified its position as a key player in the European market. The combination of advanced technology, skilled labor, and a strong emphasis on research and development enhances the competitiveness of Italian firms in the global arena. Additionally, the rising trend of personalized medicine necessitates customized packaging solutions, further driving innovation within this industry.

The strategic positioning of Italian companies, such as Sicatef and Luxenia Umbro Tiberina, ensures they remain at the forefront of this dynamic and fragmented market. As an increasing number of small and medium-sized enterprises seek consolidation, opportunities for growth through mergers and acquisitions are expected to rise.

With approximately 30% of the European market share now occupied by the Alphial group, this acquisition represents a significant force in the industry, emphasizing the importance of scale and integration for future success. This consolidation trend indicates a robust trajectory for both domestic and international growth opportunities.

Rationale Behind the Deal

The primary objective of this dual acquisition is to leverage synergies between the involved companies at both industrial and commercial levels. By strengthening operational efficiencies and expanding their product offerings, the new Alphial group aims to enhance its competitive stance and drive growth. The strategy also aligns with the buy-and-build approach adopted by Entangled Capital and Capital Dynamics, focused on cultivating excellence in fragmented markets.

In addition, the combined expertise of the two entities enhances Alphial's capability to innovate, enabling it to meet the growing demand for high-quality packaging solutions while aiming for an impressive €40 million in revenue and an EBITDA of €8 million.

Investor Information

Entangled Capital SGR, co-founded by Roberto Giudici and Anna Guglielmi, specializes in creating private equity funds that target small and medium-sized Italian enterprises. The firm has successfully executed eight investment operations, raising over €100 million since the launch of its first fund, EC I, in January 2020. Their investment strategy emphasizes support for companies with revenues between €15 million and €50 million, aiming to foster sustainable growth by reinforcing competitive positioning in the domestic and international markets.

Meanwhile, Capital Dynamics is an independent global asset manager with a strong focus on private assets, managing over $14 billion in assets. Established in 1988, the company is recognized for its commitment to responsible investment practices and innovative asset management solutions. With about 150 professionals across 12 offices globally, Capital Dynamics brings a wealth of expertise to the table, ensuring optimal alignment between stakeholders and company objectives.

View of Dealert

This acquisition marks a significant milestone in the consolidation of the European ampoule manufacturing market and appears to be a strong investment move. The strategic rationale behind the deal, paired with the robust market positioning of both Sicatef and Luxenia Umbro Tiberina, indicates a promising outlook for Alphial. The anticipated revenue growth and synergies present a lucrative path forward for the newly formed group.

Furthermore, the commitment to sustainability and a focus on high-quality production processes align well with current market trends, making this investment not only timely but also relevant in today's economic climate. The consolidation of operations is likely to enhance efficiencies and drive innovation, key factors in maintaining competitive advantage.

Overall, the investment by Entangled Capital and Capital Dynamics in these well-established companies could lead to the creation of a highly valuable entity within the pharmaceutical packaging sector. Given the substantial potential for growth and profitability, this deal is indicative of a strong investment strategy, positioning Alphial for substantial success in the future.

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