Newlat milks large stake in CLI

Italian food group Newlat has agreed to take a 46.2 per cent stake in dairy group Centrale del Latte d’Italia (CLI) for around EUR 17.48 million.

Under the terms of the deal, the buyer is offering EUR 1.00 per share in cash and 0.33 of its ordinary scrips, representing an offer of EUR 2.70 apiece.

The 46.2 per cent interest represents 6.47 million securities, based on the target’s 14.00 million in outstanding equity.

Newlat’s bid of EUR 2.70 is at a 7.1 per cent premium to CLI’s close of EUR 2.52 on 30th March 2020, prior to the announcement yesterday.

Shares have risen 5.6 per cent to EUR 2.66 at 10:11 today, representing a market capitalisation of EUR 37.24 million.

Newlat, a Parma-headquartered owner of the Delverde pasta brand, as well as a range of bakery products and baby food, is expecting the addition of CLI to boost revenue by EUR 500.00 million.

Following the acquisition of the stake, the business will launch a mandatory takeover bid for the remaining shares at the same price and the selling stockholders will reinvest in Newlat by buying a 5.3 per cent holding.

CLI produces and sells around 120 dairy products with brands such as TappoRosso, Mukki, Tigullio and Vicenza.

It generated earnings of around EUR 6.00 million on revenues of EUR 180.00 million last year.

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Some of CLI’s products include milk, yogurts and plant-based beverages.

The business has 415 employees and four factories, which have the capacity to produce 119.00 million litres of milk.

Newlat’s stock price rose 1.9 per cent to EUR 5.26 at 10:24 today, giving the business a market capitalisation of EUR 214.51 million.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 148 deals targeting Italian companies announced since the start of 2020.

This is despite the country having been on lockdown for three weeks due to the outbreak of the coronavirus, which has resulted in over 11,500 deaths in Italy, representing around a third of all global fatalities linked to Covid-19.

In the largest deal targeting an Italian company announced in the year so far, Intesa SanPaolo agreed to acquire Unione di Banche Italiane for EUR 4.86 billion.

© Zephus Ltd

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