Milk_Shake products

PARIS — Bluegem Capital Partners has acquired Panzeri Diffusion, an Italian company trading in the professional hair-care category.

Financial terms of the deal were not disclosed.

Bluegem, a European mid-market fund based in London with a focus on consumer brands, made the purchase through its Pool Service subsidiary, which was created in September 2019 after Bluegem acquired Pool Service/Medavita group. The aim with that transaction was to create an aggregator platform in the professional hair-care category.

That beauty segment, estimated at 14 billion euros globally, has been especially challenging over the past few years, so industry executives have been innovating to try and increase footfall into professional hair salons and in some instances consolidate activities to build critical mass to help in manufacturing operations and negotiating distribution deals.

Panzeri, which was founded in 1999 by Ivano Panzeri in Malnate, Italy, owns professional hair product brands that include Z.one Concept, Milk_Shake, No Inhibition, Simply Zen, Depot and Urban Tribe. The group’s products are available domestically and in international markets, including the U.S.

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Last year, Panzeri generated sales of about 49 million euros. The group employs 130 people.

“In October 2020, the acquisition of Panzeri Diffusion marks the first important step for Pool Service/Medavita for the consolidation of the field that offers significant operational synergies,” Bluegem said in a statement released Monday. “Medavita will also be able to leverage Panzeri’s successful experience in the U.S. market to develop its presence in North America.”

Once the two groups are merged, the new entity is to be named BeautyNova. It will be the third-largest group operating in the professional hair-care market in Italy — worth an estimated 540 million euros annually — with estimated aggregate pro-forma sales of about 90 million euros. Sales abroad should comprise more than 60 percent of revenues in over 70 countries, including China and Latin America, as well as the U.S.

The merged company will have more than 300 employees, a portfolio of 12,000-plus proprietary formulations and an in-house research-and-development department.

The current chief executive officer of Panzeri, Stefano Banfo, will lead the group’s development for the next few years, according to Bluegem.

Panzeri said he wanted to ensure continuity and ongoing development for the company he founded, especially as the professional hair-care market becomes ever more competitive.

He explained that’s “why I have chosen a group that has ambitious development plans and which will give added value to the extraordinary results achieved by my company up until now.”

“Together, we are sharing the extraordinary synergies that could exist and the advantages that, thanks to this transaction, we can gain for global growth, a virtuous union between the two companies,” Panzeri said. “The opportunity to remain in the province of Varese, both to safeguard the security of the collaborators and continue to be an economic value for Varesotto [the area surrounding the city of Varese] was an important consideration in my decision.”

“The deal fits perfectly into the investment strategy of the Bluegem III fund, which is focused on stable consumer brands [consumer staples] with a strong cash generation that have demonstrated resilience during the delicate phase of COVID-19,” said Emilio Di Spiezio Sardo, cofounder of Bluegem Capital Partners, in the statement. “Furthermore, this transaction confirms Bluegem’s attention to Italy, a market which we believe in and aim to accelerate the performance of some of the most promising entrepreneurial entities in the country.”

Deloitte Financial Advisory served as Bluegem’s financial adviser. Latham & Watkins and Studio Gattai, Minoli, Agostinelli and Partners were the legal and tax advisers, respectively, for Bluegem.

Panzeri’s financial adviser was Milano Global Advisors, and Studio Barberi & Volpi Associati served as its legal adviser.

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