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Lavazza announces launch of a voluntary totalitarian tender offer aimed at the delisting of machine vendor IVS Group

E-Coffee Solutions (Lavazza Group) and IVS Partecipazioni (majority shareholder of the IVS Group) signed binding agreements for the launch by the newly incorporated company, Grey S.à r.l., of a cash voluntary tender offer over all the shares of IVS Group aimed at its delisting. The Tender Offer presents favorable conditions to the shareholders of IVS Group, incorporating a premium equal to 18.9% with respect to the weighted average of the official prices of the IVSG shares in the last 6 months. In the context of the transaction call and put options exercisable from 2027 are provided as a result of which the Lavazza Group would acquire control over IVSG. The transaction represents a further investment by the Lavazza Group in the vending industry, in line with its strategy based on an omnichannel approach and on the creation of end-to-end presence facilitating direct access to consumers. IVS Group continues its development strategy on a European scale, maintaining the current management and organizational structure

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MILAN — Lavazza is strengthening its presence in the vending sector by by acquiring a further stake in machine vendor IVS, for 185 million euros ($197 million), through its investment vehicle Grey, with an eye to eventually gain full control of the company. The Group already controls a 20.4% stake of IVS through its investment vehicle Torino 1895 Investimenti.

The offer incorporate a 18.9% premium compared to the arithmetic weighted average of the official stock price during the last six months, reports Italian economic daily IlSole24 Ore. If successful the buyout offer will hand Lavazza a 28.36% stake in IVS and lead to the delisting of IVS.

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Here is the official press release from IVS Group.

LUXEMBOURG-TURIN-SERIATE (BG), Italy – E-Coffee Solutions S.r.l. (“ECS”), a company controlled by Luigi Lavazza S.p.A, and IVS Partecipazioni S.p.A. (“IVSP”), the majority shareholder of IVS Group S.A. (“IVSG”), a Luxembourg-based company at the head of the IVS Group, the market leader in Italy and the second player in the European Union in the vending market(¹), whose shares are listed in Italy on Euronext Milan, STAR segment, a regulated market organised and managed by Borsa Italiana S.p.A. (“EXM”; Euronext Milan: IVS. MI), hereby announce the signing today of binding agreements aimed at carrying out a transaction (the “Transaction”) which contemplates, inter alia, the launch of a voluntary totalitarian tender offer on IVSG shares by Grey S.à r.l. (“Grey”), a newly incorporated company currently wholly owned by ECS (the “Offer” or the “Tender Offer”).

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The consideration for the Offer, equal to Euro 7.15 per share tendered to the Offer (the “Consideration”), incorporates:

(i) a premium equal to 11% with respect to the closing price of IVSG shares as of today’s date (8.1% with respect to the official price);

(ii) a premium equal to 6.9% with respect to the official price of IVSG shares on 19 April 2024 (the last trading day prior to the date of this press release) (the “Reference Date”);

(iii) a premium equal to 18.9% with respect to the weighted arithmetic average of the official prices of IVSG shares in the last 6 months before the Reference Date (included).

The Offer is aimed at obtaining the delisting of IVSG shares from EXM, which may also be achieved through a merger subject to the satisfaction of the relevant conditions (the “Delisting”).

In the context of the overall Transaction, call and put options exercisable from 2027 have been agreed as a result of which, subject to obtaining the necessary regulatory approvals, the Lavazza Group would acquire control over IVSG.

“The structure of the transaction in case, starting from 2027, the options provided for in the agreements are exercised would allow the Lavazza Group to strengthen its ability to compete with the other major coffee players at an international level, thanks to an increasingly relevant size, also in the strategic Vending market, structuring itself even more solidly to compete in the current complex macroeconomic scenario” – has commented Antonio Baravalle, Chairman of ECS and CEO of the Lavazza Group – “with this transaction ECS will indeed be able to continue its growth path in the Vending sector, consistently with the objective of strengthening the various channels in which we operate at various levels.

The adoption of omnichannel technologies and strategies by the Lavazza Group, moreover, would allow to implement the presence on the channel, facilitating direct access to the consumer. ECS, and with it the Lavazza Group, will be able to increasingly become a global reference point in a highly fragmented sector such as that of Vending, a more and more strategic channel over which we will continue to preside with our products, as well as through the solid relationships with OCS and Vending operators, which are and will continue to be our fundamental partners on the path of growth in this sector”.

Paolo Covre, Chairman of IVS Partecipazioni, has declared: “For the varied and numerous shareholding structure of IVSP, consisting of more than 50 shareholders representing several generations of the Vending sector, the transaction with the Lavazza Group is consistent with the industrial and non-financial approach typical of a group of entrepreneurs, while allowing to liquidate, at values deemed attractive, also a minority stake in its sole controlled company”.

In particular, the following binding agreements relating to the Transaction were entered into today:

a) an investment agreement (the “Investment Agreement”) between ECS, Torino 1895 Investimenti S.p.A. (“Torino1895”), a company controlled by Finlav S.p.A. (which, in its turn, controls Luigi Lavazza S.p.A.), IVSP and Grey, aimed at regulating, inter alia:

– the promotion by Grey of the Offer aimed at acquiring, for a cash consideration equal to Euro 7.15 per share, a maximum of no. 25,842,024 IVSG shares, representing 28.36% of the share capital of IVSG (including no. 10,702,112 IVSG shares, equal to 11.74% of IVSG’s share capital, which IVSP undertook to tender to the Offer);

– ECS’s commitments aimed at providing Grey with the resources necessary for the payment of the consideration of the Offer;

– subject to the positive completion of the Offer: (i) the commitment of IVSP to contribute to Grey the overall remaining 46,243,640 IVSG shares, equal to 50.75% of the share capital of IVSG as of today’s date, as well as (ii) the commitment of Torino1895 and ECS to transfer to Grey the no. 18,588,139 IVSG shares owned by Torino1895, equal to 20.4% of the share capital of IVSG as of today’s date.

Therefore, in case of a positive outcome of the Offer and taking into account the foregoing commitments, depending on the acceptance of the Offer: (i) IVSP would hold a stake of at least 51% of the share capital of Grey and, indirectly, of IVSG, (ii) ECS would hold a stake of between 39% and 49% of the share capital of Grey and, indirectly, of IVSG, while (iii) Torino1895 would no longer hold any direct or indirect stake in IVSG;

b) a shareholders’ agreement (the “Shareholders’ Agreement”) between ECS and IVSP, with the participation also of Grey, aimed at defining the rules of governance and the transfer of the shares in Grey and IVSG, subject to the positive completion of the Offer. In particular, with reference to the governance rights pertaining to ECS, the Shareholders’ Agreement provides that, for as long as IVSP will exercise legal control over Grey and, indirectly, over IVSG, ECS will be the holder of certain governance rights for the mere protection of its indirect investment in the Issuer, including, inter alia, a representation on the board of directors of IVSG;

c) a reciprocal option agreement (the “Option Agreement”) between ECS and IVSP, subject to the positive completion of the Offer, providing for options to purchase (call options) of ECS and options to sell (put options) of IVSP on the shares held by IVSP, following completion of the Offer, in Grey (or in the company resulting from the possible merger of IVSG and Grey). The call and put options will be exercisable after the approval of IVSG’s consolidated financial statements as at 31 December 2026 (and, therefore, starting from 2027 until 2034).

Grey, by means of a communication disseminated today pursuant to article 102, paragraph 1, of Legislative Decree No. 58/1998 and article 37 of Consob Regulation No. 11971/1999, will announce that it has taken the decision to launch the Offer, together with the description of the legal assumptions, terms, conditions and essential elements of the Offer (the “Communication”). The Communication will be available, inter alia, on IVSG’s website at https://www.ivsgroup.it/.

Completion of the Offer is subject to the obtainment of the regulatory authorisations (that is, the authorisation from the Bank of Italy for the acquisition, by Grey, of a qualifying indirect controlling shareholding in Moneynet S.p.A, a payment institution belonging to the IVS Group, and the authorisation by the Secretary of State of the United Kingdom pursuant to the National Security and Investment Act 2021 consequent to the exceeding of a participation threshold, although indirect, by ECS and Grey in N-And Group Ltd. – a company of the IVS Group incorporated pursuant to English law, active in the sector of design and implementation of IT platforms and applications), as well as upon the occurrence of the conditions for the effectiveness of the Offer as set out in the above mentioned Communication. For the purposes of the Offer, the offer document, to which reference is made for a full description and evaluation of the Offer, will be published under the terms and in the modalities required by law following Consob’s approval.

This phase of the Transaction would be concluded with the Delisting of the IVSG shares, which could take place following the possible sell-out and/or squeeze-out procedures pursuant to applicable laws (or, if the conditions to proceed with the Delisting following the completion of the Offer are not met, following the possible merger by incorporation of IVSG into Grey, in line with the reasons and objectives of the Offer).
Subsequently, in case of exercise of the call and/or put options pursuant to the Option Agreement, ECS may acquire – starting from 2027 and possibly in several tranches – the entire shareholding owned by IVSP. As a result, ECS would therefore acquire the control over Grey and indirectly the control over IVSG.

Benefits of the Transaction

With this transaction, IVSP and the Lavazza Group intend to create the conditions for IVSG, an example of Italian excellence in the food & beverage sector, to pursue the development of its business, leveraging on its best human and technological skills, and explore new markets and customer bases on a European scale.
Furthermore, thanks to the Transaction, IVSG’s management, which will be confirmed, will be able to count on the support of IVSP and the Lavazza Group for adopting a long-term strategy and accelerate and expand growth plans aimed at a European leadership in Vending and the market segments related thereto.
IVSG is the second player in the European Union with a market share in Vending of ~7%(²) and the main player in Italy with a market share of 21%(³), thanks to a widespread presence throughout the national territory.

The completion of the Transaction, including the possible exercise of call and/or put options starting from 2027 and subject to the obtainment of the necessary regulatory authorisations, could contribute to make ECS an important player in the Vending market on an international scale and would allow the Lavazza Group to create economic and financial value, strengthening its presence in the Vending market. The project is part of the broader path that the Lavazza Group has been following for some years now and which concerns the OCS / Vending channel. This channel, indeed, continues to be characterised by the presence of a multitude of small local or regional operators, and is therefore still extremely fragmented. Moreover, the possibility of introducing omnichannel technologies and strategies would make it increasingly easier to build an end-to-end channel presence, thus facilitating proximity to the end consumer.

In relation to the Offer, Grey, ECS and Torino1895 are assisted by PedersoliGattai, as legal advisor, with the support of Arendt & Medernach SA for Luxembourg law aspects, and by BNP Paribas as financial advisor.

IVSP is assisted by Latham & Watkins LLP and TALEA – Tax Legal Advisory, as legal advisors.

E-Coffee Solutions

E-Coffee Solutions S.r.l. (ECS) is a company of the Lavazza Group whose purpose is to create and develop on an international level the management business in the OCS/Vending sector and an e-commerce platform specialising in the sale of coffee and related products, based on a multi-brand business model and strongly characterised by technological innovation. ECS operates through the Lavazza Professional and MaxiCoffee businesses.

IVS Partecipazioni

It is the holding company that controls the IVS Group, an Italian joint-stock company that brings together the more than 50 historic private shareholders of the IVS Group and part of its management, a nucleus formed over time also as a result of the numerous acquisitions made by IVS in the last decades.

IVS Group

Founded in 1971 as Bergamo Distributori, it is the leading vending operator in Italy and second in the European Union. The group is now active in 7 European countries, with a network of 128 branches and around 4,500 employees. In 2023, it achieved a consolidated turnover of 726 million Euro, with almost one billion coffee, snacks and beverages dispensed. Every day, around 4 million consumers make a purchase from the group’s automatic vending machines.

IVS Group is recognised, at a European level, as the main innovator in the Vending sector, both in terms of technology applied to automatic vending machines and in terms of management and control systems for services and capillary logistics.

The pursuit of a business based on attention to and quality of service for people has developed in IVS a particular sensitivity to the micro social needs of the territory, which is expressed through concrete initiatives, such as the BreakCotto project, aimed at the full integration in the world of work of young people with autism, trained in the schools of the Cottolegno Institute.

The Lavazza Group

Lavazza, founded in Turin in 1895, has been owned by the Lavazza family for four generations. Today the Group is one of the leading players on the global coffee scene, with turnover of over € 3 billion and a portfolio of top brands that lead their respective markets, such as Lavazza, Carte Noire, Merrild and Kicking Horse.

It is active in all business sectors and has operations in 140 markets, with 8 manufacturing plants in 5 countries and about 5,500 collaborators all over the world. The Group’s global presence is the result of over 125 years of growth and the more than 30 billion cups of Lavazza coffee produced every year are a testament to a remarkable success story, with the goal of continuing to offer the best coffee possible, in all forms, by focusing on every aspect of the supply chain, from the selection of the raw material to the product in the cup.

Lavazza Group has revolutionised coffee culture by investing continuously in research and development: from the intuition that marked the company’s earliest success – the coffee blend – to the development of innovative packaging solutions; from the first espresso sipped in Space to the dozens of industrial patents. The ability to be ahead of the times is also reflected in the focus on sustainability – economic, social and environmental – which has always been a benchmark for guiding corporate strategies.

“Awakening a better world every morning” is the corporate purpose of Lavazza Group, with the aim of creating sustainable value for shareholders, collaborators, consumers and the communities in which it operates, combining competitiveness with social and environmental responsibility.

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