3i, Europe's leading private equity company, announced today that it has acquired a 40% stake in Giochi Preziosi, the leading Italian toy company.
Claudio Luti's Felofin shareholding will sell its 40% stake to 3i, while Enrico Preziosi's Fingiochi will retain 53.4%, Fabrizio Bertola's Valtidone 6%, and Giochi Preziosi's management 0.6%.
The new managerial team of Giochi Preziosi SpA, a Gruppo Giochi Preziosi holding company, will include Enrico Preziosi as Chairman, and Massimo Alberti and Dario Bertè will retain their positions as managing directors. 3i's Sergio Sambonet, Marco Fumagalli and Marco Termini will all become members of the board, Sergio Sambonet as Vice Chairman.
Giochi Preziosi is the second largest European toy company after Lego, and fourth in the world behind Lego, Mattel and Hasbro. The development plan will see its quotation on the stock exchange within three years as it consolidates its leading position in the European market with a turnover of 18 billion euro, and the strengthening of its position in the world market valued at around 50 billion euro.
"This is one of 3i's most significant acquisitions in Italy", confirms Sergio Sambonet, Managing Director of 3i Italy, "We have great faith in this company as it represents one of our country's biggest business success stories - thanks to the genius of its founder, Enrico Preziosi. Giochi Preziosi is a company with substantial international growth prospects."
"3i is no doubt the best possible partner we could have found to help drive our aggressive development plan", added Enrico Preziosi, Chairman of Giochi Preziosi, "Our company has almost quintupled its turnover in the last five years, from €100 million in 1999 to €590 million in 2004, and we plan to reach €630 million this year. To secure a European market leading position in this sector we needed, above all, a partner in whom we could place our trust."
Due diligence was arranged by Boston Consulting, KPMG were financial advisors and lawyers were Studio Dewey Ballantine. Financial and contractual analysis was carried out by Gianfranco Mottola and Lorenzo Zamboni of 3i.
Notes to editors
About Giochi Preziosi
Founded in 1978, Giochi Preziosi group is the leader in the Italian toys market.
In 2004 the group recorded an overall turnover of 590 million euro with Ebitda of 70 million euro, net profit of 15 million euro, and a net negative financial position of 155 million euro.
Growth over the years:
Business Units
Giochi Preziosi's main business activity is represented by the toys division and the marketing and distribution of GIG and Giochi Preziosi branded products. Within this the Toys Center brand represents the retail division with 90 stores across Italy. Target customers are children, and boys and girls in their early teens.
Auguri Preziosi is the business unit dedicated to "back to school" products and stationery. This BU is the continuity of a previous historic brand Auguri Mondadori.
Easy Shoes & Wear is the BU dedicated to shoes and clothing for children. This business is mainly based on the exploitation of Group licenses and the marketing and distribution of the "Fashion Teen" brand developed in house.
Dolci Preziosi is mainly involved in the food & confectionery sector with some 50 million chocolate eggs sold as at spring-summer season 2003. Moreover, in 2003, Mitica Food was developed to enter the Food and Confectionery market, producing, marketing and distributing crisps and salted snacks.
Giocoplast Natale imports, markets and distributes decorations, lights and other Christmas related items. It is a seasonal business which represents a very interesting market for the Group and a good opportunity to enlarge its products portfolio. Sales are mainly through hypermarkets, wholesalers and normal trade.
Grani & Partners has recently entered the Group and operates mainly in the corporate gadget and promotional business. This subsidiary is in a position to achieve extraordinary rate of growth mainly due to its focus on tying up strategic partnerships and alliances with customers of the calibre of Panini, Parmalat, IP and De Agostini.
Finally, Giordani deals with light and heavy puericulture and the development of products for toddlers.
History
Founded at the end of the 1970's by Enrico Preziosi as a toy wholesaler, after an initial phase retailing third party products and brands, Giochi Preziosi began designing and producing its own products and brands.
1984 - 1993: this phase is characterised by a significant penetration within the domestic market through massive investment in brand and product advertising. Further organic growth was achieved with the beginning of the direct importing of toys from China.
1994 - 1998: during these years Giochi Preziosi consolidated its business and direct import activity from China and looked at the market for the acquisition of well-known brands, as well as making massive investments in R&D. In 1996, in order to improve its business relationship with Chinese manufacturers and enhance procurement activity, the Company established a subsidiary in Hong Kong with the aim of consolidating strategic partnerships with local business partners.
1999: growth via acquisition saw the buyout of GIG, the Company's main competitor in Italy at that time, and Holding dei Giochi, which is still the biggest toystore specialist in the country. Auguri Mondadori was also acquired and later incorporated within Giochi Preziosi with the new branded name of Auguri Preziosi.
2000: the Company looked for cross border penetration opportunities in foreign markets, making a strategic investment in the UK with the acquisition of a significant stake in The Character Group Plc, a public company floated in the main listing at the LSE, active in the toy and gadget businesses (tick mark CCT:LN).
2001: aside from the Group's core activities, the main shareholders and top management decided to undertake a strategic business diversification process whilst maintaining its focus on the target customer: children and young teens. Efforts were directed towards the following businesses: food & confectionery, with the establishment of the Dolci Preziosi subsidiary; shoes & clothing, through the founding of the Easy Shoes & Wear company in partnership with a third party; Christmas decorations, lights and products via the acquisition of Giocoplast Natale.
2002: buyout of gadget and promotional business from Giocoplast promotion and establishment of Grani & Partners S.p.A. with the aim of penetrating the related market and achieving the leadership in a relatively short period of time.
2003: acquisition of Mitica Food, a company active in the Food and Confectionery business specialising in crisps and salted snacks.
About 3i
3i is a world leader in private equity and venture capital. We focus on Buyouts, Growth Capital and Venture Capital and invest across Europe, in the United States and in Asia Pacific. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.
In the year to 31 March 2005, 3i invested £962m, including co-investment funds. 3i's Buyouts business operates primarily on a pan European basis, investing in businesses with a transaction value of up to €1 billion. In the year to 31 March 2005, Buyouts invested £532m. During the same period, its Growth Capital business, which focuses on high growth companies expanding organically or through acquisition, invested £274m across Europe and Asia. 3i's Venture Capital business invested £144m in the year to 31 March 2005. The venture capital business invests in early stage technology companies throughout Europe and US.
