INDUSTRY 4.0 FUND INVESTS IN SOFT N.W.

A new investment for the Quadrivio Group private equity fund as it backs technological innovation for SMEs. The fund secures a majority stake in this Biella-based company specialized in making nonwovens with isotropic properties

Industry 4.0 Fund has bought a majority stake in Soft Non Woven S.p.A.. The private equity vehicle belonging to Quadrivio Group ‒ which invests in digital transition and technological innovation for SMEs ‒ has completed its third investment of 2021 through its acquisition of this enterprise producing nonwovens.

Founded in 1974 in Quaregna Cerreto, in the Biella area of Italy, Soft N.W. currently specializes in manufacturing and distributing nonwoven fabrics, which are 100% spunbonded polypropylene and extremely well-suited to industrial uses, such as for roofing, building materials, filtration and agriculture.

The Verzoletto and Falco families owning and helming the company will remain part of its management and will also be reinvesting, working alongside the fund to accomplish the development strategies: these aim to further strengthen the enterprise’s management and to consolidate the company’s position on its markets, which are bolstered by counter-cyclical undercurrents.

Today Soft N.W. manufactures and exports its products worldwide: 90% of its turnover is generated abroad, particularly in Germany and Eastern Europe. The company will close its 2021 accounts on a turnover of 36 million euros and an EBITDA of approx. 6 million euros.

The year 2020 saw Soft N.W. launch a new line of products based on patented technology capable of making nonwoven textiles even more hard-wearing, in line with the demands of both the agriculture and building sectors.

Pietro Paparoni, Investment Director at Quadrivio Group, commented: “This transaction stems from our goal of making the most of the substantial investments in Soft’s production capacity, also by instilling maximum synergy with Texbond, the company acquired by our group on 15 July 2021 and operating in the same field. The venture confirms the strategic importance of private equity as an aggregator for industrial enterprises that enable existing managerial and human capital to be fully harnessed while also attracting new executives capable of piloting the intense growth forecast for the near future.”

Roberto Crapelli, Managing Partner at Industry 4.0 Fund, confirmed his satisfaction at the transaction: “I believe this acquisition will allow us to further enrich the Industry 4.0 portfolio, encouraging creation of a nonwovens group capable of fully responding not only to needs in the personal-care and construction fields but also in more specialist segments such as agriculture and filtration. This operation has also enabled us to enhance our business plan with significant digitalization action in keeping with the sector.”

For Alessio Rossi, Partner at Quadrivio Group, “This is our second important transaction in the sector and lays solid foundations for creating a leading European group on the nonwovens market. It also perfectly illustrates how private equity can contribute to the growth of Italy’s industrial fabric.”

Olmo Falco, Partner and Board Member at Soft N.W., added: “The nonwoven textiles sector has undergone radical change in recent years, fostering both increasing specialization in niches with great added value and a process of constant consolidation. This is why we’ve decided to take this further step in growth, opening up to Quadrivio Group’s Industry 4.0 Fund, which we view as a solid partner with lengthy experience. Becoming part of Texbond S.p.A. shows just how much the fund believes in our sector and that it is aiming ‒ by also joining Soft N.W. ‒ to create a nonwovens group of international prominence.”

For Andrea Casartelli, General Manager at Soft N.W.: “Quadrivio Group joining the company stands as a unique occasion for continuing support to our expansion through a broad and long-lasting range of opportunities. The vision shared by investors translates as a business plan pivoting on the development of new markets and uses, on constant product research with sustainability to the forefront, and on careful attention to Soft’s typical clientele.”

The Industry 4.0 Fund team was assisted in contractual matters by the Giliberti Triscornia & Associati legal office (Francesco Cartolano and Chiara Cella), and in structuring the transaction and debt by the Investment Banking management (Diego Selva) at Banca Mediolanum and its M&A team (Lorenzo di Rosa, team leader, with Mattia Varriale, Valentino Cerboni and Giuseppe Fiori). The due diligences were conducted by PWC regarding the financial and legal aspects (Federico Mussi, Giovanni Stefanin and Alvise Becker), and by Russo De Rosa Associati for taxation (Alberto Russo and Alessandro Manias). The business due diligence was carried out by Kearney (Andrea Marinoni). Grant Thornton acted as Advisor (Sante Maiolica) to the selling party, while its legal matters were entrusted to Studio Condinanzi (Massimo Condinanzi and Giacomo Ubertalli). The financing banks: Intesa San Paolo, Monte dei Paschi di Siena Capital Service and BPER Banca.