Introduction to the Target

Sviluppo Sostenibile, a private equity fund focusing on investments in Italian SMEs with an emphasis on ESG themes, has acquired a majority stake in GM International S.r.l. ("GMI"). Founded in 1993 by Glisente Landrini in Villasanta, Italy, GMI specializes in designing, manufacturing, and marketing intrinsic safety instruments for the process industry, specifically within explosion-risk environments. The company produces a range of safety devices including switches, electronic boards, and other safety applications aimed at minimizing explosion risks in hazardous facilities. With a strong commitment to research and development, GMI has established itself as a global leader in this critical sector, securing complex certifications through ongoing investment to enhance and modernize its production capabilities.

Currently, GMI has a production facility in Italy and boasts seven commercial branches in strategic global locations, including the USA (Houston), Mexico (Mexico City), France (Lyon), UAE (Dubai), Singapore, China (Shanghai), and Japan (Yokohama). The company has consistently distinguished itself for innovation, fast-tracking its way to becoming a trusted partner for major industrial automation manufacturers and suppliers.

Industry Overview

The process safety market in Italy is vital, particularly given the country's significant industrial base that includes chemical, petrochemical, and manufacturing sectors known for their explosion risks. With Italy's commitment to stringent safety regulations and standards, companies like GMI are well-positioned to thrive, leveraging their expertise to provide crucial safety solutions that align with regulatory requirements. As the demand for high-quality safety instrumentation escalates, organizations must adopt advanced technologies and robust safety systems to mitigate risks effectively.

Moreover, the increasing focus on sustainability and environmental protection has fueled growth in this sector, particularly regarding safety measures that prevent environmental disasters. The European Union’s directives on industrial safety necessitate rigorous adherence to safety standards, creating opportunities for intrinsic safety solutions among key players.

In the broader European market, innovations driven by technological advancements and regulatory compliance continue to shape the intrinsic safety sector. Companies are investing heavily in research and development to stay ahead of emerging risks and capitalize on new market trends. This heightened focus on intrinsic safety offers a favorable landscape for GMI to expand its reach and influence.

As industries recover and adapt post-pandemic, the importance of advanced safety measures becomes even more pronounced. GMI’s strategic positioning, combined with its comprehensive international presence, enables it to cater to an increasingly safety-conscious market driven by regulatory pressures and corporate responsibility.

The Rationale Behind the Deal

This strategic partnership aligns with GMI's industrial development and growth plan, helmed by Glisente Landrini’s children, particularly Paolo Landrini, who will assume the role of CEO, along with seasoned international manager Zdravko Petkovic as General Manager. The acquisition allows GMI to enhance its managerial capabilities and accelerate its expansion within a competitive market, further solidifying its key role in the sector.

Paolo Landrini remarked, "Given our expertise, technology, and service to leading global players in the process industry, it is the right time to fortify our market presence. We have found in DeA Capital the perfect partner, combining experience in SME management with our fundamental ethical principles. We are excited to embark on this new phase of our company’s history." This statement exemplifies the shared vision between GMI and Sviluppo Sostenibile for future growth and innovation.

Information About the Investor

Sviluppo Sostenibile operates under DeA Capital Alternative Funds SGR, concentrating on private equity opportunities within the Italian SME landscape. With a strong commitment to ethical investments, the fund pursues businesses poised for growth while promoting ESG principles. This acquisition marks Sviluppo Sostenibile's seventh transaction since its establishment in late 2020, highlighting its proactive approach to building a diversified portfolio centered on sustainable business practices.

The fund’s management team, including Managing Director Marco Albanesi and Investment Director Filiberto Basile, underscores a robust understanding of the industry landscape. They view GMI as a critical player in a delicate sector where safety applications can significantly mitigate environmental and human risks, reinforcing their confidence in the investment’s potential.

View of Dealert

This acquisition is positioned as a promising investment for several reasons. GMI’s established reputation and innovative capabilities in the intrinsic safety sector provide confidence in its growth trajectory. The focus on expanding managerial expertise and reinforcing its organizational structure further positions GMI for success in a competitive market landscape.

Moreover, Sviluppo Sostenibile’s strategic insight and commitment to driving ethical growth align seamlessly with GMI's ongoing development plans. The synergy between GMI's operational strengths and DeA Capital’s business acumen suggests a robust framework for navigating industry challenges and capitalizing on growth opportunities.

Furthermore, the current emphasis on safety and sustainability within various industrial sectors enhances the relevance of GMI’s offerings. As industries adapt to new safety regulations and environmental standards, GMI stands to benefit from this growing need for sophisticated safety solutions.

In conclusion, this partnership appears to be a well-calculated investment that could yield substantial long-term returns, given GMI’s industry leadership, innovative capabilities, and the strategic direction provided by Sviluppo Sostenibile.

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