The two founders of the company divorce, a new American partner arrives and suddenly opens up new prospects on international markets. It happened to Engineering, a computer engineering company listed on Piazza Affari in the Star segment. Last week the Amodeo family parted ways with their allies, the Cinaglias, by selling 29,9% of the company to One Equity Partners (Oep), a fund that manages 10 billion dollars on behalf of JP Morgan. The operation was expected, but initially the top management of the company feared that a hostile takeover bid could come from the USA. The company's accounts could have suggested a choice of this type: in the first quarter the ebitda reached 18,2 million euros (+34,6%) and the ebit 12,9 million (+50,4% ), while revenues amounted to 189,8 million (+7%).
In the end, however, the fund decided to stop one step before the threshold which makes the takeover bid mandatory: 3,6 million shares changed hands at 32 euros per share, for a countervalue of approximately 116 million. The Cinaglias therefore remain in the pocket of 34,99% of Engineering, while the 35,02% is floating (in the last six months the stock has gained more than 20 points on the Stock Exchange). How do the company's perspectives change at this point? We talked about it with the managing director, Paolo Pandozy.
FIRSTonline – What innovations will the entry of Oep bring?
“We expect our new shareholder to bring us greater international visibility thanks to his important network of acquaintances and contacts in every corner of the world. We have known this fund for years, which is already in the capital of companies of our type, for example in Brazil and Turkey. We therefore believe that Oep will be able to help us a lot from the point of view of expansion abroad, but of course we will also continue the consolidation of our activities in Italy, from which we now derive 90% of our turnover".
FIRSTonline – Which markets does your expansion project focus on?
“We are already significantly present in Brazil and we would like to continue to grow more decisively on various growth markets: from Turkey to the Gulf countries, from North Africa to Eastern Europe, with particular attention to those countries that are not yet in the European Union and where our skills could have different outlets”.
FIRSTonline – After the entry of Oep at 29,9%, in your opinion are the prospects for a takeover bid in the medium term definitively archived?
“A takeover bid can always come from anyone, but at this point the situation is certainly much more stable than it was a few weeks ago. Oep's decision to remain below the tender offer threshold has certainly allowed us to overcome the uncertainties of recent times, consolidating our position. Also because the new shareholder considers this a medium-long term investment”.
FIRSTonline – Through Engineering Tributi you are also active in the collection market: what prospects open up in this business with the disengagement of Equitalia at the end of the year?
“This is one of the fronts we are focusing on for the future. At the moment we collect taxes for just under a thousand Municipalities and for some time now we have been offering our services as an alternative to those of Equitalia. However, it is difficult to make predictions, since it is a sector subject to unstable legislation. Equitalia has already obtained two extensions – the last until the end of 2013 – so we just have to wait for developments in the coming months. For our part, we can say that Engineering Tributi's business is going very well. The agreement we signed with Emilia Romagna is becoming a model throughout the country. We are also carrying out similar projects in other areas of Italy, because we believe that if all the Municipalities move independently without coordination at the regional level, the collection activity becomes much more difficult”.
FIRSTonline – Today the Engineering share trades at around 30 euros, but some analysts set the target at 35 or even 39 euros. Do you think your shares are so undervalued?
“We believe Oep got an excellent deal buying our shares at 32 euros. The value of our stock to date is clearly underestimated: several analysts maintain this and I believe that their estimates are also approximated by default. Also because there are a number of factors that could support us in the future, for example the payments decree, which potentially generates an extraordinary cash flow, since we have to collect as much as 200 million from the Public Administration".
FIRSTonline – In general, what are the dynamics that characterize your sector in Italy?
“The Italian market is characterized by an enormous fragmentation of small suppliers who don't have the strength to survive on their own, above all due to difficulties in accessing credit. Ours is a sector in crisis, which is reducing its size, but at the same time is going through a process of consolidating around a few excellent companies. On April 30, for example, Engineering bought T-Systems Italia Spa (now Engineering.mo, ed), a company in difficulty. And we are talking about the Italian branch of a large German multinational”.
