Category: News

SICIT Group launches a purchase of its own shares programme in execution of the resolution approved by the ordinary Shareholders’ Meeting held on 1 March 2019, as a useful strategic investment opportunity for any purpose permitted by current legislation and, in particular, with the aim of providing the Company with a stock of own shares in view of the possible future incentive plans in favour of employees and/or directors of the Company and/or as payment, also for the exchange of shareholdings with other parties, as part of transactions in the interest of the Company, it being understood that the Company reserves the right to assign the shares in its portfolio for other purposes permitted by current legislation, according to its own interest.

The purchase of shares operations to implement the programme will take place in compliance with the equal treatment of shareholders, according to and within the operating limits provided by the above-mentioned resolution, by art. 5 of the European regulation no. 596/2014 (the so-called MAR) and, in general, by the applicable general and sectoral legislation, specifically:

• the purchases will concern a maximum total of 300,000 ordinary shares of the Company, with no indication of their nominal value, for a maximum equivalent of € 3,000,000;
• the purchases will be made at a price that is not higher than the highest between the price of the last independent transaction and the price of the highest current independent offer on the trading venues where the purchase is made, it being understood that the unit price may not be lower by a minimum of 20% and higher by a maximum of 10% compared to the arithmetic average of the official prices recorded by the SICIT Group S.p.A. share in the 10 trading days prior to each individual purchase transaction;
• purchases will be made for volumes not exceeding 25% of the average daily volume of SICIT Group S.p.A. shares on the trading venue where the purchase is made, calculated on the basis of the average daily volume of trading in the 20 trading days prior to the date of purchase;
• the purchase programme will start on 1 July 2019 and last until 1 September 2020.

SICIT Group announces that today the merger by absorption of SICIT 2000 into SprintItaly has become effective.
As of today, the ordinary shares and warrants of the Company – which has taken the registered name “SICIT Group S.p.A.” – are traded on the AIM Italia.

• Today’s listing on the Italian Stock Exchange will allow to increase the visibility on world markets and to complete the medium-long term industrial project in high growth sectors.
• Completion of the 100-million-euro business combination with SprintItaly aimed at accelerating SICIT’s strategic development plan in Italy and abroad, boosting existing plants and R&D laboratory, as well as building a new production plant in South America.
• Thanks to its resilience and international leadership position, favoured by a “green” business model based on the circular economy, SICIT expects to grow at a high rate in the coming years, so as to continue to create value for investors.

May 20 is also the date:

• of settlement of the withdrawal rights exercised by the shareholders of SpI in relation to the Merger (and of the related option and pre-emption right);
• of effectiveness of the extraordinary dividend in favour of the ordinary and special shareholders of SpI (before the Merger);
• of start of the grouping of the ordinary and special shares of SpI (before the Merger).

SICIT Group’s listing on the Italian Stock Exchange is the result of the business combination – carried out through the Merger – with SpI, the Italian SPAC created by the mix of the distinctive and complementary characteristics of its founders, Fineurop S.p.A., Gerardo Braggiotti, Matteo Carlotti and Francesco Pintucci, who boast managerial success stories and more than twenty years of experience in extraordinary finance and private equity transactions.

A 100-million-euro operation aimed at accelerating the Company’s strategic development plan in Italy and abroad, boosting the existing plants in Arzignano (VI) and Chiampo (VI), the R&D laboratory and building a new production plant in South America. The project has been completed so quickly as SICIT is an Italian SME of excellence with a solid international market position in high growth sectors, thus generating strong profitability. Moreover, the company’s management – which remains in the capital and takes part in the new development stage – is highly skilled and has a clear long-term strategic vision.

Massimo Neresini, CEO of SICIT, said: “Today is a day of fundamental importance for SICIT and for the entire tanning district of Vicenza. The completion of the business combination with SprintItaly and the listing take place in a strategic key, to accelerate and strengthen the long-term growth path undertaken. From now on we will be even more visible on the international markets, being able to develop in a few years the important industrial plan approved”.

Gerardo Braggiotti, Chairman of SprintItaly’s Board of Directors, commented: “The full completion of the operation in just five months witnesses the confidence that our investors placed in a company that combines all the characteristics we were looking for: innovation, solid market positioning and high growth potential. A new development stage is starting today, which – we are sure – will allow to create value in the future for all shareholders“.

SICIT appointed Giampaolo Simionati as the company’s new Chief Financial Officer (CFO).

Giampaolo has more than 15 years of experience in finance and accounting, as well as in consulting and auditing. Giampaolo began his professional experience as a junior analyst in an Italian consulting boutique and then – for a short period – in some multinational groups (ITW and P&G). After graduating in Economics, in 2006 he joined the audit division of KPMG Italy, working for national and multinational clients in the industrial, retail and fashion sectors. Since 2009 he has been part of the Deal Advisory’s central team of excellence where he was promoted manager and then senior manager. He has been involved in both buy-side and sell-side financial due diligence for numerous PE funds and corporate clients, as well as restructuring and re-financing projects.

Massimo Neresini, CEO of SICIT, said: “We are experiencing a period of significant acceleration of our business that will allow us to further improve our leadership position in the market. Giampaolo’s proven experience and professionalism in economic-financial analysis and auditing make him the ideal figure to support us along this path of growth, particularly with regard to relations with our investors”.

 

The Board of Directors of SICIT 2000 approved the draft of the financial statements as at 31 December 2018, prepared in accordance with Italian accounting principles. On 8 April, the draft financial statements as at 31 December 2018 of SICIT Chemitech S.p.A. were also approved – the company will be acquired by SICIT in accordance with the agreements related to the Business Combination and before it becomes effective. The figures approved today are in line with the ones as at 30 September 2018, approved in the context of the Business Combination.

On the basis of the 2018 financial statements draft approved, below the following consolidated figures:

• Revenues: approx. € 55.1 million
• EBITDA: approx. € 22.7 million
• Net profit: approx. € 13.4 million
• Net Cash: approx. € 14.5 million
• Shareholders’ equity: approx. € 69.9 million

The 2018 revenues increase in biostimulants and retardants for the gypsum industry exceeded the contraction in the turnover of fuel from animal fats, due to the reduction in the selling price during the year.
EBITDA as a percentage of revenues in 2018 was excellent at around 41.0%, while net profit as a percentage of revenues in 2018 was around 24.1% – already net of part of the non-recurring costs incurred for the Business Combination operation with SprintItaly.

The Net Cash position at December 31, 2018 was close to € 15 million, despite:

• the significant investments financed during the year
• the distribution in July 2018 of an extraordinary dividend of approximately € 6.7 million.

Massimo Neresini, CEO of SICIT, commented: “In an intense year, during which the company had to focus also on the Business Combination transaction that will lead us to the Stock Exchange, SICIT has been able to maintain a positive performance, while planning major investments aimed at containing the volatility of the price of fuel from animal fats. The consolidated results show the correctness of the strategic choices made and the solid growth path of SICIT“.

In light of the results for the year, as well as in line with the dividends distributed by SICIT in previous years and with the dividend policy announced as part of the Business Combination, also in view of the timing of its execution, the Board of Directors approved the proposal to the Shareholders’ Meeting to distribute to the shareholders of the company resulting from the Business Combination an overall amount equal to 50% of the consolidated net profit of 2018.

The ordinary dividend per share of the Combined Entity is currently estimated at approximately € 0.34 based on the expected number of shares that will make up the share capital of the Combined Entity upon payment of the dividend, i.e. following the Business Combination and the conversion of the first tranche of special shares.

UNIC – Concerie Italiane, the most important and organised association in the tanning sector worldwide, through its subsidiary Lineapelle S.r.l., acquired a stake in SprintItaly, which it will incorporate through a merger SICIT, with consequent admission of the latter to the multilateral trading system AIM Italia of Borsa Italiana. The stake held by the UNIC-Lineapelle Group should be around 2% of the voting share capital of the post-merger company.

Today, UNIC represents about 1,200 companies, with a total of about 18,000 employees and a turnover of about 5 billion Euros, 76% of which for export. The Italian tanning industry is an historical and consolidated example of circular economy, as it removes a large quantity of waste from the slaughtering industry (animal remains), significantly reducing the environmental impact, creating an high-added product with technical characteristics and performance of the highest level, maintained over time.

Gianni Russo, Chairman of UNIC – Concerie Italiane and Lineapelle, said: “The acquisition of a stake in SICIT is a proof of our confidence in the future of the sector and is fully in line with the strategic goals of the association, authoritative and attentive partner of the Italian tanneries in their path towards a continuous development of sustainability, with increasingly investments“.

Massimo Neresini, CEO of SICIT, added: “The investment of UNIC – Concerie Italiane represents an important endorsement of SICIT’s green business model, which makes us proud and can only reassure the financial markets about the quality of their investment. Moreover, this decision also proves the quality of the work we have done over the years, allowing us to further strengthen our presence on international markets“.

SICIT strengthened its partnership with Bayer with reference to two products for the global market: AmbitionTM and BayfolanTM Cobre. The two brands, currently distributed respectively in Brazil and India, will soon be introduced, once the registration stage is completed, also in Asia (China) and in the other Latin American countries.

The collaboration between the two companies is further strengthened, after the signing of the exclusive distribution agreement in July 2017, which guaranteed to Bayer the worldwide distribution of BayfolanTM Cobre and BayfolanTM Aktivator for foliar use in various crops, as well as the development of formulations based on some well-known SICIT technologies in the treatment of amino acids and peptides of animal origin.

Hartmut van Lengerich, head of the Crop Protection division of Bayer, said: “Biostimulants strengthen our portfolio of crop protection products: they are a complementary tool in our integrated crop management program that helps farmers worldwide improve perfromance and crop quality in a sustainable manner“.

Crops suffer from a wide range of stress: solutions such as AmbitionTM and BayfolanTM Cobre stimulate plant growth and improve their natural defences against these stresses.

Oreste Odelli, Managing Director with responsibility for SICIT’s sales activities, commented: “The strengthening of our collaboration with Bayer is a recognition of the quality of the work done by SICIT and will allow us to further improve our presence in international markets. We were among the first in the world to introduce, in the 1960s, biostimulants for agriculture based on amino acids and peptides, and we still provide innovative solutions that make farming more and more sustainable“.

Biostimulants based on amino acids and peptides of animal origin are increasingly used in agriculture and horticulture, and are at the centre of growing global interest as they enable sustainable and environmentally friendly production. In particular, they combat abiotic stress, improve crop quality and performance and promote soil microflora renewal: for these reasons, products containing amino acids can be used in organic agriculture in Europe, Latin America and Asia.

SprintItaly held the Extraordinary and Ordinary Shareholders’ Meeting of the Company to pass resolutions regarding the business combination with SICIT 2000 S.p.A.
The Extraordinary Shareholders’ Meeting, held in second call, in the presence of 62.38% of the ordinary share capital, by a unanimous vote of the members present, approved the Business Combination and therefore:

• the Merger plan, and the new text of the Articles of Association governing the company resulting from the Merger (the “Combined Entity”) subject to, and as from, the date on which the Merger becomes effective to third parties;
• the distribution of SprintItaly’s reserves to its ordinary and special shareholders, for an amount equal to the resources available to the Company in excess of those necessary for the Business Combination (€ 100 million) following the liquidation of any ordinary shares subject to withdrawal, i.e. for a maximum of € 50 million;
• the grouping of all the ordinary and special shares of SprintItaly according to a grouping ratio such that the implicit value of the shares after the grouping is equal to Euro 10.00 each, also due to the outcome of the withdrawal and the distribution of reserves.

The merger plan was also approved by the Extraordinary Shareholders’ Meeting of SICIT on 28 February 2019, which also passed the necessary resolutions for the purposes of the Business Combination and the preliminary operations as envisaged by the Merger plan.

Massimo Neresini, CEO of SICIT, said: “We are satisfied with this result. The combination with SprintItaly and the consequent listing will increase our visibility on the world markets and will allow us to accelerate a well-defined medium/long term industrial project, in high growth sectors linked to macro-trends“.

Gerardo Braggiotti, Chairman of the Board of Directors of SprintItaly, added: “We thank our investors for having been able to appreciate the quality and potential of the target identified. SICIT is a leading company, unique in its kind, which globally supplies the main players of the agronomic, agrochemical and industrial sectors; with a ‘green’ business model, based on the circular economy as well as with a growth rate, an international coverage and an economic-financial performance perfectly in line with the ideal profile that we had proposed during the IPO“.

SICIT completed the installation and launch of the cogeneration plant, which allows significant energy savings in the Arzignano (Vicenza) plant.
The project is part of the important investment plan that the company approved for the period 2019-2022 to offer a product with increasingly high-added value, in line with market demands.

Massimo Neresini, CEO of SICIT, said: “Since it was founded in 1960, SICIT has paid great attention to environmental issues, creating a unique model of circular economy in the tanning industry’s world. At the same time we have never stopped investing, innovating processes and products, so as to always be able to respond to the dynamics of the market. This is why we have approved an important Plan for the next four years that combines sustainability, excellence and strengthening of production capacity“.

The first of the two is a post-combustion plant for environmental improvement. The installation began in August last year at the Chiampo plant and has been operating 24 hours a day since January 2019. The audit by ARPAV (Regional Agency for Environmental Prevention and Protection of Veneto) and the Province of Vicenza – Environment Sector has given a very positive result, to allow the issuance of the new authorization valid for another 10 years. The analytical results have shown that the pollutants emitted into the atmosphere are well within the regulatory limits, with a reduction efficiency of about 98%.

The second is a cogeneration plant, installed between December 2018 and January 2019, and is currently in the start-up stage with a production potential of 1,000 kWh. It allows a saving of electricity and methane of 20% for the Arzignano plant and up to 14% for both locations. When it reaches its full potential in 2020, it will allow a potential production of 1,560 kWh, generating an energy recovery of about 30% for the Arzignano plant and up to 22% for both.

SprintItaly’s Board of Directors approved the business combination operation with SICIT 2000, already approved by the Board of Directors of the latter.
The Business Combination consists of a number of corporate transactions and will be completed through the merger by incorporation of SICIT into SprintItaly: it constitutes a reverse-takeover operation pursuant to art. 14 of the AIM Italia Issuers’ Regulations.

SprintItaly, SICIT and Intesa Holding (currently sole shareholder of SICIT) today signed the agreement governing the Business Combination. The Boards of Directors of SprintItaly and SICIT have also approved the Merger plan which will be submitted to the relevant Shareholders’ Meetings.
The objective of the operation is to support SICIT’s development strategy in the relevant markets, which in recent years recorded double-digit growth rates. The development plan is aimed at strengthening SICIT’s market leadership through an increase in production capacity in Italy and the extension of its international presence, for example in Asia and the American continent. In particular, the plan provides for the launch of a plant in South America (near a local tanning centre).

Main terms of the operation
Following the approval of the Business Combination, and in particular of the Merger, by the Shareholders’ Meetings of SprintItaly and SICIT and in accordance with the conditions contained in the Framework Agreement, SICIT will be incorporated into SprintItaly; the resulting company of the Business Combination will be named “SICIT Group S.p.A.” and will be listed on the AIM Italia, with the aim of moving to the Borsa Italiana’s Mercato Telematico Azionario (possibly the STAR Segment) when the conditions and in the necessary technical time have been met.

Before the Business Combination, SICIT and Intesa Holding are expected to carry out preliminary and preparatory activities, including the acquisition by SICIT of the entire share capital of the parent company SICIT Chemitech S.p.A., which mainly carries out research and development activities aimed at improving SICIT products and related production processes.

In relation to the Business Combination, an equity value of € 160 million was attributed to the SICIT Group; this value was determined on the basis of the estimated consolidated EBITDA of the SICIT Group at 31 December 2018 and the amount of the consolidated net cash of SICIT Group at 31 October 2018 (positive for € 3.4 million). For information only, this equity value corresponds to a multiple of Ev/EBITDA 2017 of approximately 7x and a PE of approximately 12x.

SprintItaly shareholders, with an investment of € 100 million, will initially have approximately 54% of the Combined Entity (which may become approximately 60%, fully diluted).
Of this, € 70 million will be allocated to the purchase of SICIT shares owned by the controlling shareholder, Intesa Holding, and € 30 million will be allocated to strengthen the capital and financing the growth programme, in Italy and abroad, of the Combined Entity.

The remaining resources of € 50 million will be distributed to SprintItaly’s shareholders net of the outlay for any withdrawals related to the Business Combination, in accordance with the law and the articles of association, for a total amount of the distribution between approximately € 5 million (in the event of maximum withdrawal) and € 50 million (in the event of no withdrawal).

In consideration of the need for the Business Combination and the consequent distribution of resources of the Company mentioned above, also for the purpose of a better determination of the Merger exchange, the shares of SprintItaly will be grouped together in such a way that, as a result of the Merger, the implicit value of the shares will be equal to € 10.

Moreover, prior to the Business Combination, the promoters will subscribe a capital increase of SICIT to be carried out through the issue of special shares, with characteristics in line with those of SprintItaly, at a unit price of € 10. As a result of this increase, following the Merger and therefore the grouping and exchange operations, the promoters will once again hold (considering the SprintItaly special shares already held at that date) the original 300,000 special shares of the Combined Entity (pre-conversion of the special shares).

It should be noted that, in the context of the Business Combination, the promoters of SprintItaly propose to modify the terms of conversion of the special shares, in order to align their interests with those of the investors. In fact, it is proposed to eliminate all the triggers for the conversion of special shares post Business Combination (originally set at prices of € 11, € 12 and € 13 per ordinary share) and to set a single threshold of € 13.50 with the extension of the reference period to 5 years. In this way, SprintItaly’s promoters will convert the majority (i.e. 65%) of their special shares only after market investors received the maximum number of shares from the exercise of their warrants (which, please note, have an acceleration threshold of € 13 per ordinary share) and therefore achieved an estimated total return, between shares and warrants, of more than 50%. This proposed amendment is based on the promoters’ conviction of the growth and development potential of the Combined Entity in the medium term.

In addition, in agreement between the parties, it was decided to maintain unchanged the ratio for the assignment of warrants to be assigned to the Business Combination (equal to 3 warrants for every 10 ordinary shares held prior to the grouping) and therefore of the conversion shares for investors despite the reduction in SprintItaly’s investment in the Business Combination and the consequent return of the above resources (which would normally have resulted in a proportional reduction in the warrants), thus increasing the leverage in favour of each ordinary investor who joins the Business Combination.

In order to protect the Combined Entity from any damage that is the immediate and direct consequence of past behaviour, in the Framework Agreement Intesa Holding is committed to refund the Combined Entity up to a maximum amount of € 16 million.

Finally, by the date of signature of the Merger deed, PromoSprint Holding (as promoter of SprintItaly), Intesa Holding and the majority shareholders of Intesa Holding will sign agreements, having as their object:

• the composition of the Board of Directors of the Combined Entity, which will be composed of 11 members, including 4 independent directors and 2 of the current directors of SprintItaly, in line with the provisions of the Framework Agreement;
• two lock-up commitments related to: (i) the shares held by Intesa Holding in the Combined Entity and (ii) the shareholdings held by certain majority shareholders in Intesa Holding (representing a total of 51.5% of the share capital of the same), both with a duration of 48 months from the date of effectiveness of the Merger;
• a dividend policy aimed at distributing, in each financial year, 50% of the consolidated net profit of the financial statements.

Rino Mastrotto, Chairman of the Board of Directors of SICIT, said: “I am proud of this result, which crowns almost thirty years of management by the tanners of the Arzignano district (Intesa Holding) and which brings SICIT to the Stock Exchange to guarantee a new stage of growth and development“.

Gerardo Braggiotti, Chairman of the Board of Directors of SprintItaly, commented: “The work of these months allowed us to identify a company that fully reflects the goal set and represents the best opportunity for our shareholders, also considering the current context of the financial markets. SICIT is a company that combines in an excellent way innovation, solid market positioning and high potential. The Business Combination agreement, made possible by the opening of the current ownership and the vision of a forward-looking management, will give a strong boost to the implementation of the development plan, making SICIT an ideal candidate for a successful IPO“.

The merger
The Merger Plan provides for an exchange ratio of (i) no. 1 ordinary share of the Combined Entity for every no. 1 ordinary share of SICIT and (ii) no. 1 special share of the Combined Entity for every no. 1 special share of SICIT.

The Merger will be approved on the basis of the following reference balance sheets, pursuant to Article 2501-quater of the Italian Civil Code:

• SprintItaly’s balance sheet as at 30 September 2018, consisting of a balance sheet, income statement, cash flow statement and notes to the accounts, prepared in accordance with ITA GAAP accounting principles and approved by SprintItaly’s Board of Directors on 13 December 2018;
• interim financial report of SICIT as at 30 September 2018, pro-forma to reflect the acquisition of Chemitech and the additional operations prior to the Merger provided for in the Framework Agreement, prepared in accordance with ITA GAAP accounting standards, consisting of the balance sheet, income statement, cash flow statement and notes to the accounts, approved by the Board of Directors of SICIT on 19 December 2018.

In accordance with SprintItaly’s Articles of Association, the resolution of the shareholders’ meeting to change the corporate purpose necessary to carry out the Business Combination will be resolutely subject to the fulfilment of both of the following conditions:

• the exercise of the right of withdrawal by a number of shareholders who did not participate in the approval of the aforesaid change in the corporate purpose representing at least 30% of the ordinary share capital
• the completion of the procedure for the liquidation of such withdrawing shareholders through the redemption or cancellation of a number of ordinary shares equal to or greater than 30% of the ordinary share capital. In this regard, it should be noted that under the law and the articles of association, the liquidation value of any ordinary shares of SICIT subject to withdrawal has been fixed at € 10 per share.

Timing
The shareholders of SprintItaly will be called upon to approve the Business Combination at the Shareholders’ Meeting, which will then be convened by means of a special notice published, inter alia, on the website www.sprint-italy.com in the “Significant Transaction” section.
The Business Combination is expected to be completed before summer 2019.

Advisor
In the operation SprintItaly has been advised by KPMG for the financial due diligence, by Chiaravalli Reali e Associati for the fiscal due diligence, by TAUW Italia for the environmental due diligence and by WillisTowerWatson for the insurance due diligence and by Goetz for the business due diligence. Banca Finint has been financial advisor to Sicit’s shareholders, initially supporting entrepreneurs in the preparation and selection of the operation and then in the selection of SPAC and in the structuring and negotiation of the operation.
Banca IMI (Intesa Sanpaolo Group) acts as NOMAD and SprintItaly Specialist, while Gatti Pavesi Bianchi acted as legal advisor to the parties.