(AGENPARL) – mar 11 luglio 2023 RedFish LongTerm Capital S.p.A
Holding
For a Good Catch Get a RedFish
ADD | Fair Value: €2.26 | Current Price: €1.51 | Upside: 50%
€ Million
Total Revenues
Net Profit
margin
Shareholding equity
FY20A
FY21A
Initiation of Coverage
FY22A
FY22PF
20,344
7,055
7,196
35.4%
6,126
16,708
23,787
23,809
(4,351)
(9,198)
6,387
Source: Company data
Overview. RedFish LongTerm Capital S.p.A (RFLTC) is an industrial holding company mainly
specialized in investments in Italian family-run SMEs with promising growth plans and great cash
generation. To complete RFLTC’s business, capital injections are combined with advisory
agreements to provide monitoring activities and support in extraordinary financial transactions
(e.g. M&A, capital raising, IPO etc.), internationalization and hiring of new managers. The
company was founded in 2020 by a team led by Paolo Pescetto and Andrea Rossotti and boasts
an experienced management team with consolidated relationships and track record in the
investment and financial field. The company aims to close two or three €10mn club deals per year
with an expected investment by RFLTC of ca. €3mn per deal. RFLTC has a rating by Modefinance
of Investment Grade A3-.
A well-diversified and low-risk profile portfolio. As of today, RFLTC has raised ca. €20mn of
equity, ca. €3mn of convertible bonds (converted at the IPO) and €8.8 of debt and cumulated net
profits of about €9mn. RFLTC has invested €30.8mn in seven companies, creating a welldiversified and low-risk profile asset portfolio (FY22 aggregated value of production and EBITDA
of the current holdings is €192mn and ca. €22mn, respectively):
• Convergenze S.p.A., Utilities sector with a focus on fiber and connectivity (12.5% acquired in
2020 for €1.1mn);
• MaticMind S.p.A., Technology sector with a focus on Cloud and Cybersecurity (4.2% acquired
in 2020 for €5.1mn; sold during 2022);
• Tesi S.r.l., Aerospace sector (20% acquired in 2021 for €5.1mn, plus earn-out);
• Solid World Group S.p.A., Technology company with a focus on 3D printing software and
hardware (6.13% acquired in 2022 by converting a bond in IPO for €1.05mn);
• Pistacchio S.p.A., Food&Beverage industry with a focus on pistachio products (20% acquired in
2022 for €1mn plus earn-out; sold during 2022);
• Expo Inox S.p.A., production of steel chimneys (20% acquired in 2022 for €6mn);
• Movinter S.r.l., active in the supplying of components for high-speed trains (100% acquired in
2023 for €11.5mn. We note that, after the closing, a 4% was sold to IC8 S.r.l.).
Investments were carried out by acquiring a majority stake – also through club deals – or qualified
minorities with an average ticket of €4.4mn and an average EV/EBITDA of ca. 5.6x.
July 11, 2023 – 7.00 h
Ufficio Studi
Mauro IACCINO
Federica FIORENZA
Market Data
Ma i n Sha rehol ders
MAIOR S.r.l.
Ba nca Va l s a bbi na
OMR Hol di ng S.p.A.
Mkt Ca p (€ mn)
EV (€ mn)
Sha res out.
Free Fl oa t
15.7%
27.0%
Stock Data
52 Wk Hi gh (€)
52 Wk Low (€)
Avg. Da i l y Tra di ng 90d
Pri ce Cha nge 1w (%)
Pri ce Cha nge 1m (%)
Pri ce Cha nge YTD (%)
134,333
n.a .
n.a .
n.a .
Market overview. RFLTC focus is the Italian SMEs market that, at the end of 2022, according to
Cerved, reached ca. 157,000 non-financial enterprises (excluding micro-enterprises, less than 10
employees or less than €2mn revenues), totaling €1bn+ revenues and ca. €270mn of value-added.
The Italian SMEs are increasingly interacting with equity investors to support their growth path
and digital transformation and to reinforce their management team. This has also been proved
by the deleveraging trend recorded in the last decade, from 115% in 2008 to 60% in 2021.
IPO. On June 30th, 2023 RFLTC went listed raising ca. €4mn (excluding greenshoe) at a stock price
of €1.50ps, resulting in a market cap at IPO of €28.7mn and a free float of 27%. The market cap
also includes the conversion of the €3mn convertible bond, issued in June 2022 and converted at
the listing price. The main IPO rationale is to boost investment opportunities and allow RFLTC’s
shareholders to eventually liquidate their investment on the market in the long run.
Valuation. Our valuation based on a sum-of-the-parts model, i.e. the sum of the value of the
stakes held in the subsidiaries, returns a fair value of €2.26ps (€43.3mn equity value).
KT&PARTNERS PREPARED THIS DOCUMENT
PURSUANT TO AN ENGAGEMENT LETTER ENTERED
INTO WITH MIT SIM S.P.A. ACTING AS SPECIALIST
IN ACCORDANCE WITH ART. 35 OF EURONEXT
GROWTH MILAN MARKET RULES FOR COMPANIES.
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Contents
Investment Case
Company Overview
RedFish LongTerm Capital S.p.A.
A Well-Diversified and Low-Risk Profile Portfolio
Divested Holdings
Scouting for New Opportunities
Company’s History
Ownership and Group Structure
Management Team
Business Model
Investment Process
Investor Returns and Compensation
Founding Partner Compensation
Manager Compensation
Market Overview
Euronext Growth Milan: The SME Stock Exchange Market 20
Competitive Positioning
Historical Financials
Consolidated Financial Statement
Consolidated Income Statement
RFLTC Income Statement
RFLTC Capital Structure Analysis
Use of Proceeds
Valuation
Holdings Valuation
July 11, 2023 ? 2
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Investment Case
Experienced Management Team. RedFish Long Term Capital (RFLTC) was founded by an
experienced team of professionals led by Paolo Pescetto. The company’s key management –
Paolo Pescetto (Chairman), Andrea Rossotti (CEO), Simone Lo Giudice and Lorenza Castelli
(Investment Managers) and Joanna Gualano (Legal Director) – boasts a solid track record in
the investment and financial field such as Private Equity, M&A, Portfolio Management,
Strategic Consulting, etc. Leveraging on the highly professional capabilities of its management
and its wide network, which also participates in investments through “club deals”, RFLTC
supports enterprises to enhance their profitability, improve their capital management and
develop growth opportunities.
Broad Italian SME market with growing attention to financial market. RFLTC enjoys
countless investment opportunities, as the Italian market is mainly composed of small and
medium enterprises (SMEs). Indeed, as of the end of 2022, according to Cerved, there were
ca. 157,000 non-financial Italian SMEs, which totaled over €1bn of revenues. Furthermore, in
the past few years, entrepreneurs have shown a higher inclination towards financial markets
as proven by: i) the deleveraging trend of the last decade (from 115% of 2008 to 60% of 2021);
and ii) the signal of recovery of 2022 Euronext Growth Market – the Italian stock exchange
segment dedicated to SMEs – in terms of listings (8 IPOS in 4M23 vs 4 IPOs in 4M22), after a
2022 impacted by macroeconomic uncertainties (26 listings) and after the 2021 record levels
in terms of both numbers of listings (45 listings vs the 2019 record of 30 IPOs) and capital
raised (€458mn vs 2017 record of €175mn).
RFLTC’s distinctive positioning. RFLTC is characterized by a long-term holding period
approach (no drag-along or pre-determined exit terms), supporting the subsidiary as a solid
partner along its growth path. Indeed, RFLTC’s core business is to support its subsidiaries in
their growth strategies, combining capital injections with the offer of advisory services.
Thanks to its experienced team and wide network, the company offers: i) performance audit
services; ii) advisory services related to extraordinary operation with a focus on M&A strategy
and execution; iii) support in optimizing the company’s financial profile; and iv) advisory
services for the managerialization of the subsidiary, also supporting the hiring of managers.
IPO rationale. On June 30th, 2023, RFLTC went listed raising ca. €4mn (excluding greenshoe)
at a stock price of €1.50ps, resulting in a market cap at IPO of €28.7mn and a free float of
27%. The market cap also includes the conversion of the €3mn convertible bond, issued in
June 2022 and converted at the listing price. Along with the issue of new shares, the listing
envisages the issuing of ca. 4.9mn warrants (1:2 conversion rate and a strike price of €1.65,
€1.82, €2.00 for each exercise windows of 2023, 2024 and 2025 respectively) assigned to IPO
and convertible bond investors. Having a long-term investment approach, the main rationale
of the IPO is to support company growth and give the opportunity to RFLTC’s shareholders to
eventually liquidate their investments on the market. Thanks to the capital raised since the
launch of the holding, RFLTC aims at participating in two or three €10mn club deals per year
in companies with an EBITDA > €2mn, with an expected investment by RFLTC of ca. €3mn
per deal. Furthermore, the IPO’s proceeds will be also used in the set-up of a SICAF in a joint
venture with Banca Profilo with the aim of investing in medium companies with an EBITDA
> €5mn. We note that promoters have a commitment of €16-20mn of which €10mn from
RFLTC (€5mn expected to be directly injected by RFLTC and €5mn expected to be raised from
RFLTC network).
Statement of risk. RFLTC is subject to the risk associated with the financial performances of
the participating companies. However, the holding enjoys a well-diversified investment
portfolio with participation in different industries and is planning to expand its portfolio by
investing in two or three additional companies each year. Furthermore, the holding is subject
to the risk of fluctuations in terms of the holdings’ performances, which may affect RFLTC’s
value. However, thanks to its long-term investment strategy, RFLTC may be less subject to
market cyclicality.
July 11, 2023 ? 3
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Company Overview
RedFish LongTerm Capital S.p.A.
RedFish LongTerm Capital (RFLTC) is an industrial holding company specialized in acquiring
stakes in Italian small and medium enterprises (SMEs) run by families which intend to make
the company grow, generating an EBITDA over €2mn with an incidence on revenue above
10%. RFLTC acquires majorities stake – also through club deals – and qualified minorities with
strong governance agreements, with a long-term holding period approach.
RFLTC mainly enters the capital of companies that are leaders in their market niches, with
promising growth plans and great cash generation. RLTFC adopts an active investment
approach, teaming up with entrepreneurs and top management with the purpose of speeding
up companies’ growth and improving shareholders’ returns. Indeed, RFLTC offers the
participating companies different services such as finance advisory to managers, performance
audit and management control, and advisory services related to M&A strategy and
transactions.
Founded in 2020 by a management team led by Paolo Pescetto (Chairman) and supported by
Andrea Rossotti (CEO) and Simone Lo Giudice (Investment Manager), the holding has already
raised ca. €32mn: i) €20mn of equity, including IPO capital raise, (we note that for its capital
raise, RFLTC usually operates with the crowdfunding platform Opstart to reach a wider
investors pool, while giving them the opportunity to invest through a recognized and certified
platform); ii) ca. €3mn of convertible bonds issued in June 2022 – subscribed by retail
investors – with an interest rate equal to 6% per annum that has been converted at the listing
price; and iii) €8.8mn of debt financing.
Since its foundation, RFLTC has invested €30.6mn (€30.8mn including transaction costs), both
through direct investments and club deals, acquiring stakes in seven companies (the average
investment ticket was ca. €4.4mn), active in different sectors:
Current holdings: Convergenze S.p.A., Tesi S.r.l., Solid World Group S.p.A., Expo Inox
S.r.l. and Movinter S.r.l..
Divested holdings: MaticMind S.p.A. – sold in October 2022 following the Tag Along
clause – and Pistacchio S.p.A. – sold in December 2022 to optimize IPO’s perimeter.
Holdings Portfolio
Status
Company Name
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Convergenze
Maticmind
Solid World
Pistacchio
Expo Inox
Movinter
Total
Average
Sector
Investment Date
Investment (€mn)*
Stake
FY22 Turnover
(€mn)
FY22 EBITDA
(€mn)
Utilities
Technology
Aerospace
Technology
Food&Beverage
Stainless Steel Chimneys
Railroad Equipment
lug-20
ott-20
ott-21
dic-21
feb-22
nov-22
apr-23
12.5%
20.0%
20.0%
20.0%
96.0%
191.6
EV/EBITDA
acquisition
multiple
Divestment Divestment
Value (€mn)
ott-22
dic-22
Source: Company data.
Note: FY22 turnover and EBITDA are reported only for the current holdings.
We note that after the acquisition of a 100% stake in Movinter for €11.5mn, RFLTC sold a 4% stake to a financial partner (IC8
S.r.l.)
At the end of 2022, according to the company, the RFLTC group reported a shareholder equity
of €23.9mn and a net income of €7.2mn on a pro-forma basis., i.e. considering the full year
contribution of Movinter, whereas the value of holdings – as reported by RFLTC’s
management – was equal to €35.8mn (before Movinter acquisition). RFLTC, thanks to its lean
cost structure and a variable remuneration system for its managers, has the aim of generating
positive net profit for each year.
July 11, 2023 ? 4
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
A Well-Diversified and Low-Risk Profile Portfolio
As of May 22nd, 2023, RFLTC holds a portfolio of five companies active in different sectors,
thus lowering the risk profile: Convergenze (Utilities), Tesi (Aerospace), Solid World
(Technology), Expo Inox (Stainless Steel Chimneys) and Movinter (Railroad Equipment).
Convergenze S.p.A. (€1.1mn investment, 12.5% stake)
On July 27th, 2020, RFLTC acquired a 12.5% stake in Convergenze through the vehicle G&RP
Consulting, for a total deal consideration of €1.1mn (or at FY19 EV/EBITDA 5.8x) by also
acquiring the right to appoint a member of the Board of Directors and the Board of Auditors.
Furthermore, RFLTC signed with Convergenze an advisory contract of ca. €30k per year to
support the company in their extraordinary financial operations (i.e. M&A, financing etc.)
such as for the acquisition of a 100% stake in Positivo S.r.l. in June 2022.
At the end of December 2020, Convergenze listed on the EGM market with a market
capitalization of €12mn (excluding price adjustment shares) and a fundraising of ca. €3mn.
RFLTC is subject to a lock-up until the end of 2023. Since the IPO, Convergenze has recorded
a +7% performance.
Convergenze: Shareholders
Source: Company data
Convergenze: Performance since the fisrt trading day
Source: FactSet
Convergenze S.p.A. is a multi-utility company based in Capaccio Paestum (SA), active since
2005 in the TLC or Telecommunications market, and since 2015 it has engaged in the supply
of energy and natural gas.
Through its TLC business unit (34% of FY22 total VoP), Convergenze provides wireless
connectivity, fixed telephony, cloud services, and customized ancillary services. As of today,
the company boasts a 2,282km FTTH fiber optic network (authorized since 2014) and over
100 radio bridges for the Internet.
July 11, 2023 ? 5
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
The Energy and Natural Gas unit (66% of FY22 total VoP) focuses on the supply of electricity
from renewable sources and in methanization processes for the supply of natural gas to
residences and businesses under the ConGas brand.
In FY22, the company recorded €28.4mn of VoP (+18.4% CAGR17–22 and +50.3% YoY), mainly
driven by the growth recorded by the Energy and Natural Gas business unit (+97% YoY to
€18.8mn). FY22 EBITDA margin adjusted came to 5.1%, down by 4.6pp YoY mainly due to the
price shock of natural gas and the cost of electricity and a higher incidence of personnel costs.
Convergenze: 2020–22 Financials
€ million
Turnover
EBITDA a dj
EBITDA margin adj
14.0%
(0.1)
Source: Company data
Tesi S.r.l. (€5.0mn investment,1 20% stake)
On October 13th, 2021, RFLTC co-invested with Invitalia Fondo Cresci al Sud, acquiring a 20%
stake in Tesi for a total consideration of €5.0mn (€5.1mn including transaction costs) or at
6.8x FY21 EV/EBITDA. In 2022, RFLTC also paid a €400k earn-out based on FY21 results and
further earn-outs will be paid until the 2024 results to a maximum of €3mn. RFLTC has
received the right to appoint a member of the Board of Directors and the Board of Auditors
of Tesi.
Tesi S.r.l.: Shareholders
Source: Company data
Based in Salerno, Tesi S.r.l. is a leading Italian company acting as a Tier-2 mechanical
manufacturer (source: RFLTC’s company information) in the aerospace sector (civil, space and
defense).
The company has POA and DOA certifications also thanks to a very highly qualified advanced
engineering division. In the coming years, the company may leverage its strong cashgeneration ability to make acquisitions and consolidate its positioning.
After two years negatively impacted by the slowdown in the civil sector due to Covid-19, in
FY22 recorded a +6.1 YoY growth reaching €15.6mn of Value of Production and an EBITDA
margin 26.3%.
Tesi S.r.l.: 2020–22 Financials
€ million
Turnover
EBITDA
EBITDA margin
20.9%
27.2%
26.3%
(4.3)
(2.2)
Source: Company data
The investment amount does not include transaction costs
July 11, 2023 ? 6
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
RFLTC also signed and an advisory agreement of €15k per semester to support Tesi in: i)
scouting for and acquiring companies with a complementary offer (aerospace equipment,
composite materials, helicopter manufacturing, railway and military components); and ii)
implementing a management control system.
Solid World S.p.A. (€1mn investment, 6.13% stake)
On December 27th, 2021, RFLTC invested €1.05mn (acting as lead investor) in a convertible
bond issued by Solid World, also obtaining the right to appoint a member of the Board of
Directors and the Board of Auditors.
The company listed on the EGM market in July 2022. Following the IPO and the conversion of
the convertible bond, RedFish holds a 6.13% stake in Solid World.
Solid World S.p.A.: Sharholders
Source: Company data
Solid World: Performance since the fisrt trading day
Source: FactSet
Solid World is one of the main 3D digital system integrators supporting enterprises in
developing and manufacturing products incorporating 3D technologies. It provides an
integrated offer that includes software, hardware and services.
Solid World provides its solutions to different end-markets including automotive, aerospace,
mechatronic, sport system, home design and luxury. More recently, thanks to the new
division (BIO3MODEL), Solid World also offers its solution to hospitals, clinics and nursing
homes.
Solid World S.p.A.: 2020-22 Financials
€ mi l l i on
Revenues
EBITDA
EBITDA margin
Source: Company data
July 11, 2023 ? 7
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
In September 2022, RFLTC signed an agreement with Solid World for €30k to support the
company in: i) scouting for companies to be acquired in order to complete its offer and
expand its market share; and ii) raising capital (debt or equity).
Expo Inox S.p.A. (€6mn investment, 20% stake)
On November 15th, 2022, RFLTC acquired through the vehicle RFLTC Inox a 20% stake in Expo
Inox – a leading Italian operator active in the research, design, production and marketing of
stainless-steel flue solutions and systems – for a total consideration of €6mn or at 5x FY22
EV/EBITDA. RFLTC also signed an advisory agreement for €48k to support Expo Inox in: i)
scouting for companies to be acquired in order to further expand its market share in Europe
where the company has recently consolidated its positioning thanks to the acquisitions made
in France and Turkey; ii) debt fundraising; and iii) opening new subsidiaries abroad. RFLTC is
already negotiating the acquisition of a company branch of an Italian competitor of Expo Inox
and supporting the company in opening a subsidiary in UK.
Expo Inox S.p.A.: Shareholders
Source: Company data
Expo Inox is an industrial holding directly and indirectly controlling six companies with
production plants and distribution centers in several European countries, whereas the sales
service is backed by a drop-off logistics facility of more than 20,000 square meters near Milan.
Expo Inox S.p.A.: Group Structure
Source: Company data
The Group boasts a wide product range of chimneys in different materials: steel, stainless
steel, copper, iron, aluminum, plastic.
In FY22, Expo Inox generated €67.2mn of value of production in 2022 (+39% CAGR2020-22)
and an EBITDA of €8.8mn (+45% CAGR2020-22), implying an EBITDA margin of 13.1%.
July 11, 2023 ? 8
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Expo Inox S.p.A.: 2020-22 Financials
€ million
Turnover
12.0%
13.5%
13.1%
EBITDA
EBITDA margin
Source: Company data
Movinter S.r.l. (€11.5mn investment, 96% stake)
On April 20th, 2023, RFLTC acquired – through Rail Fish S.r.l. – a 100% stake in Movinter – a
company active in railroad equipment industry and Tier 1 partner of OEM operators (source:
RFLTC company information) – for a total consideration of €11.5mn (€8.5mn paid at the
closing date, €1.5mn to be paid by March 2023 and €1.5mn to be paid by March 2024) or at
4.7x FY22 EV/EBITDA. We note that after the acquisition RFLTC sold a 4% stake to a financial
partner (IC8 S.r.l.). RFLTC – also following the appointment of Simone Lo Giudice as Co-CEO will support Movinter’s financial team and support the company in acquiring targets active in
the Railway and Naval industries (a due diligence has been carried out for a potential target).
Movinter S.r.l.: Shareholders
Source: Company data
Movinter S.r.l.: Organizational Chart
Source: Company data
Company Overview
July 11, 2023 ? 9
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Based in Genoa with an operational headquarters in Savona (ca. 35,000 square meters of
production area), Movinter provides through two business units (BUs) equipment for the
railway industry:
BU light carpentry (ca. 64% of total revenue) engaged in the production of
complex and standard components for trains and locomotives (i.e. boogie frames,
cowcatchers, white water tanks, driver desks). Movinter is also active in retrofitting
existing carriages of trains;
BU piping (ca. 36% of total revenue) specialized in bending and pre-assembly of
piping and carpentry. Over the last 20 years, Movinter has become a major player
for piping for all major railroad operators, developing in 2021 and 2022 a new
solution that allows to delivery to customers pre-assembled pneumatic systems
ready for installation on trains.
The company is developing a third business unit which will produce larger carpentry
equipment (i.e. roof, headers etc.) and it is expected to be in full operation in two years.
Movinter S.r.l.: Business Units
Source: Company data
Movinter is already a Tier-1 partner of OEM operators and it is getting a POA certification to
acquire orders also from an important OEM operator in the aerospace field.
Thanks to a staff of 100 employees and external partners, Movinter covers all the phases of
the production process: the development of the orders, procurement of raw materials,
production, assembly, and distribution.
Movinter S.r.l.: Business Model
Source: Company data
Market Overview and Positioning
The European railway market was worth €281bn in 2022 and it expected to grow at a 5%
CAGR22-30, reaching €436bn in 2030 also thanks to public investments aimed at expanding
the train fleet and renewing the exiting rail infrastructure (in Italy €95bn from the PNRR will
be allocated to the railway market).
The European railway sector has significant room for growth considering that on average only
17% and 8% of European freight and passengers, respectively, were transported by rail over
the 2018-21 period. Furthermore, rail is also the most sustainable way of transport, with an
average emission 75% lower than cars and 80% energy savings compared to heavy vehicles
(trucks & lorries).
July 11, 2023 ? 10
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Freight and passengers transported by rail
Source: Company data
The Italian railway market is characterized by a high level of fragmentation and is mainly
composed of small players. For major orders, railway OEMs are keen to rely on more
structured suppliers that also offer engineering and product development/production
support. In this highly fragmented market, Movinter is well positioned to further integrate its
offer through M&A or partnerships thus reinforcing its Tier-1 partner positioning.
Movinter S.r.l.: Competitive Positioning
Source: Company data
Historical Financials
In FY22, Movinter reached €22.8mn of Value of Production, growing by 19% CAGR2020-22.
Over the 2020-22 period, EBITDA increased by 56% CAGR, amounting to €3.3mn in FY22 with
a margin of 14.6%. FY22 NFP stood at €4.1mn or 1.2x NFP/EBITDA.
Movinter S.r.l.: 2020-22 Financials
€ million
Turnover
13.8%
14.5%
EBITDA
EBITDA margin
Source: Company data
July 11, 2023 ? 11
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Divested Holdings
MaticMind S.p.A. (€5.1mn investment, 4% stake)
On September 30th, 2020, RFLTC co-invested with Fondo Italiano d’Investimento (anchor
investor) in MaticMind, acquiring a 4% stake – through Elettra S.p.A. – for a total
consideration of €5.0mn (€5.1mn including transaction costs) or at 3.4x FY20 EV/EBITDA. In
October 2022, MaticMind’s 100% stake was sold for ca. €320mn to the private equity fund
CVC Capital Partner and Cdp Equity by Fondo Italiano di Investimento and RFLTC S.p.A., having
RFLTC – thanks to the Tag Along clause – the right to follow in the sale. Following the sale of
its stake, RFLTC realized a return on capital invested of 52% (a multiple on invested capital of
2.4x). It is worth noticing that further sums and earn-out could be cashed-in by RFLTC subject
to the satisfaction of some conditions.
Founded in 2006, MaticMind is a spin-off of the Italian business of Ascom AG, involved in ICT
consultancy for remote working. MaticMind is one of the leading Italian Value Adding
Resellers (VAR), providing solutions and services in the networking, cybersecurity, cloud and
data center field. It operates in Italy, employing 700+ people and collaborating with over 150
partners. In FY21, MatcMind generated €349mn of value of production with an EBITDA
margin 10.9%.
RFLTC has supported MaticMind in M&A activities, allowing the company to double its top
line and improve its marginality in two years. Indeed, in 2H21, MaticMind acquired Megamind
(formerly New Charger), whereas in 1Q22 it closed two M&A deals, acquiring SIND and ITI
Sistemi.
MaticMind S.p.A.: 2019–21 Financials
Maticmind S.p.A.
€ million
Value of Production
EBITDA
EBITDA margin
300.4
290.7
348.9
10.9%
(28.4)
Source: Company data
Pistacchio S.p.A. (€1mn investment, 20% stake)
In February 2022, RFLTC acquired a 20% stake in Pistacchio S.p.A (brand Marullo). Being the
company in a turnaround phase and thus showing risk profile not in line with RFLTC’s
portfolio, in October 2022, Pistacchio was sold to KayakFO for a total consideration of €1.1mn,
recording a return on capital invested of ca. 10% in 8 months (plus €24k of revenues from
advisory services).
Pistacchio is a food company specializing in the production and processing of pistachios,
hazelnuts and other nuts into semi-finished products for the ice-cream industry and finished
products for the large-scale retail trade. The company operates in a highly cyclical segment,
as the pistachios of Bronte ripen once every two years.
FY22 VoP (refer to the period September 2021–August 2022) stood at €27.4mn, whereas
EBITDA reached €2.3mn with a margin of 8.4%.
Pistacchio S.p.A.: 2020–22 Financials
€ million
FY22A
Value of Production
10.2%
13.5%
EBITDA
EBITDA margin
Source: Company data, KT&Partners’ elaboration
July 11, 2023 ? 12
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Scouting for New Opportunities
Leveraging on the group’s ecosystem, the management network and capital raised, RFLTC is
well positioned to seize value-creating investment. The company is looking for new
opportunities to invest directly or through club deals in different industries (i.e. precision
mechanics, railway, aerospace, food, ICT and Telco), pursuing its diversification strategies to
maintain a low-risk profile.
July 11, 2023 ? 13
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Company’s History
Company Foundation
RFLTC was founded in March 2020 by Paolo Pescetto and Andrea Rossotti (RedFish) and
Francesca Bazoli and Gregorio Gitti (Castello di Perno), with the aim of supporting Italian
SMEs thanks to long-term investments in majority equity stakes – often through club deals –
or in qualified minorities.
First capital increase and first
two investments
The company raised its first €6.2mn on July 20th, 2020, and right after, on July 27th, closed its
first investment, acquiring a 12.5% stake in Convergenze SpA for €1.1mn. On September 30th,
2020, RFLTC closed its second deal, investing €5.1mn in MaticMind for a 4.2% stake.
Second capital increase and
third investment
In the first half of 2021, the company closed its second capital increase, raising €4.7mn at a
stock price of €1.15. Thanks to the increased AUM, RFLTC closed its third deal on October
13th, 2021, acquiring for €5.1mn a 20% stake in Tesi S.r.l..
Third capital increase and
fourth investment
In the last quarter of 2021, RFLTC raised an additional €5.3mn – the third capital increase
reaching a total capital raise of ca. €16mn – at a stock price of €1.25. Furthermore, on
December 27th, 2021, the holding invested €1mn in Solid World SpA – subscribing a
convertible bond – the company’s fourth investment.
First half of 2022: Fifth
investment and Convertible
issuing
In February 2022, RFLTC closed its fifth investment, acquiring a 20% stake in Pistacchio SpA
for €1mn (stake sold for €1.1mn in December 2022). In June 2022, RFLTC issued a €3mn
convertible bond with an interest rate of 6%, duration of 12 months and strike price equal to
IPO price.
Second half of 2022: first
divestment and sixth
investment
In October 2022, CVC Capital Partners and CDP Equity acquired the 100% of MaticMind,
allowing RFLTC to cash-in its 4.25% stake for €12mn. In November 2022, the Company
acquired a 20% stake of Expo Inox, for a total deal consideration of €6mn.
First 100% stake and IPO
process
In April 2023, RFLTC completed a 100% stake acquisition in Movinter S.r.l for €11.5mn.
Furthermore, the company raised ca. €8.8mn debt and completed its IPO process in June
2023, raising ca €4.0mn of capital (excluding greenshoe).
RedFish Milestone – at the end of April 2023
Source: Company presentation
July 11, 2023 ? 14
RedFish LongTerm Capital S.p.A
Price: €1.51 | Fair Value: €2.26
Ownership and Group Structure
The company was founded by a management team led by Paolo Pescetto (Chairman) and
Andrea Rossotti (CEO) – now supported by Lorenza Castelli and Simone Lo Giudice as
Investment Managers and Joanna Gualano as Legal Director – and prior to IPO raised €16.1mn
of equity from ca. 60 investors.
Prior to the IPO the shareholding (14.5mn shares) was composed of: i) ca. 70% class A shares
(more than €1mn of minimum investments) which appointed the majority of the Board of
Shareholders; ii) ca. 30% class B shares (€25k of minimum investments) with no voting rights,
which, together with the class A shares have been converted into ordinary shares at the IPO;
and iii) ca. 10k class X Shares owned by RFLTC promoters that will not be listed.
The main shareholder was Maior S.r.l. with a 21% stake, followed by Banca Valsabbina (12%
stake) and OMR Holding (8% stake). We note that among RFLTC’s shareholders we also find
other companies of the RedFish ecosystem such as Red-Fish Kapital SpA (5% stake) and
RedFish S.r.l. (2% stake).
RedFish Long Term Capital Pre-IPO Shareholders
RED-FISH KAPITAL
SPA; 5%
Massimiliano
Punzo; 6%
Others
Luigi Punzo; 6%
OMR Hoding; 8%
Banca Valsabbina;
MAIOR SRL; 21%
Source: Company data
On June 30th, 2023 RFLTC went listed raising ca. €4mn (excluding greenshoe) at a stock price
of €1.50ps, resulting in a market cap at IPO of €28.7mn and a free float of 27%. The market
cap also includes the conversion of the €3mn convertible bond, issued in June 2022 and
converted at the listing price. Along with the issue of new shares, the listing envisages the
issuing of ca. 4.9mn warrants (1:2 conversion rate and a strike price of €1.65, €1.82, €2.00 for
each exercise windows of 2023, 2024 and 2025 respectively) assigned to IPO and convertible
bond investors. After the IPO and prior to the greenshoe option, the shareholding (19.1mn
shares) was composed of Maior S.r.l. with a 16% stake, followed by Banca Valsabbina (9%
stake) and OMR Holding (6% stake) while the free float was equal to 27%. We note that, in
case of full exercise of greenshoe option, the free float would increase to 28%.
RedFish Long Term Capital Pre-IPO Shareholders
MAIORS.r.l.;
Market; 27%
Others (