The private equity fund Candover has agreed to buy a 40 percent stake in Technogym for about €400 million, valuing the large Italian fitness equipment company at €1 billion in terms of enterprise value. The majority stake will remain in the hands of the family of Nerio Alessandri, founder and chairman of the company.
A stock market listing is possible at a later stage. The fund is expected to remain a medium- to long-term partner in the company, which plans to undergo a change of management, creating the position of chief executive officer. Alessandri will remain as chairman.
Mediobanca and Merrill Lynch acted as advisers in the transaction, which assigns high multiples to Technogym. Last year, the company had a gross operating profit before amortization and depreciation of more than €68 million. Free cash flow reached about €30 million. The company booked sales of €385 million, up from €336 million in 2006. Almost 90 percent of them were generated outside of Italy, where they were flat, according to the company. Sales grew strongly in the U.K., France and the United Arab Emirates. Sales in China jumped by 120 percent.
The company sees room for strong growth in emerging markets. It recently signed a joint venture deal in Dubai and it is making inroads on the Chinese market. It will be the exclusive supplier of fitness equipment at the 2008 Olympic Games in Beijing.
The press release issued by Technogym indicates its intention to enter new segments of the broad and rising wellness market and of considering possible acquisitions to accelerate its expansion.
While focusing on the commercial fitness sector, where it has achieved a leading position in many European countries thanks to its unique high-end positioning, the company has begun to develop in the area of home fitness, working in part with interior designers. It plans to inaugurate later this year a brand-new campus in Cesena to accommodate its head office, its main factory and a major health and fitness center.
