Dcoop and Acesur have signed a binding contract to jointly acquire 91.99% of Deoleo Holding, the company that groups the business of the manufacturer of brands such as Carbonell, Hojiblanca, Koipe and Bertolli. The transaction, reported this Thursday by Deoleo to the National Securities Market Commission (CNMV), assigns a total company value of 520 million euros to the group of the company.
The agreement provides for other partners to join as sellers, which would make it possible to raise the transmitted stake up to 100%. The purchase and sale has not yet been completed: it needs competition authorizations in Spain and the United States, foreign investment permits in Italy, and approval by Deoleo’s general meeting of shareholders.
The transaction brings to an end the process of searching for a buyer in which an alliance between the Italian Coricelli and the Spanish Migasa also participated. Both companies had submitted a joint offer.
A valuation of 520 million euros
The figure communicated by Deoleo corresponds to the company value of the company, referring to 100% of its share capital. It therefore does not equate to the amount that the selling shareholders will receive directly. The final consideration will be calculated based on the value of equity and will take into account, among other elements, net financial debt and adjustments to working capital at the closing date.
Deoleo estimates, for illustrative purposes, that the value of equity corresponding to its 50.99% stake in Deoleo Holding could be between 190 and 200 million euros. The company warns that this is an estimate that may vary and that the final amount will depend on the adjustment mechanisms established in the contract.
In addition, the agreement provides for depositing part of the consideration into an escrow account to cover an Italian tax contingency that affects Carapelli Firenze. If 100% of Deoleo Holding is transferred, the deposit could reach 80 million euros for all sellers. The portion corresponding to Deoleo, S.A.’s stake would have an approximate maximum of 40.8 million.
The communication sent to the CNMV details the criteria used to select the proposal from Dcoop and Acesur. Among them are the price offered, the lower execution risk compared with the other bids received, and the planned timeline for signing and closing.
Deoleo expressly highlights that the proposal is fully funded and that it is subject to a limited number of conditions precedent. The divestment process was led by the board of directors of Deoleo UK, to which the Deoleo Holding shareholders’ agreement attributes that responsibility. The selected proposal was subsequently submitted to Deoleo, whose board will submit it to the general meeting of shareholders.
The fight for the company had faced several candidates. Europa Press reported in August that Coricelli had raised its offer to 500 million euros, above the proposals then known of Dcoop, 470 million, and Acesur, 460 million. Subsequently, on October 30, the agency reported on the alliance between Coricelli and Migasa to present a joint bid.
Six or eight months to complete the authorizations
The closing requires approval from the competition authorities in Spain and the United States, in addition to authorizations for direct foreign investment in Italy. Deoleo estimates that processing these permits may be prolonged approximately between six and eight months from the date of the announcement, although it warns that this timeframe is indicative.
Approval by the general meeting of shareholders will also be necessary. Ole Investments B.V., holder of 56.96% of Deoleo’s share capital, has irrevocably committed to vote in favor of the transaction.
The contract also incorporates a condition related to the Bertolli brand. During the two months following the announcement, Mizkan may formally communicate its intention to terminate any of the brand’s license agreements due to the change of control. If it does so within that period, it could affect compliance with the conditions necessary to complete the purchase and sale.
Until the permits are obtained and the other contractual conditions are met, Dcoop and Acesur will not have completed the acquisition. Deoleo has announced that it will inform the market when relevant milestones in the process are reached.