Merger of PRIMA VERA in GREENITALY1, the first SPAC specialized in the green economy

GREENITALY1, the first SPAC dedicated to green economy, sponsored by Mr. Matteo Carlotti, VedoGreen and IDEA Capital Funds SGR, announced the acquisition of PRIMA VERA

PRIMA VERA, one of Italy’s leading players in energy efficiency space, now enters capital markets in order to strengthen its domestic leadership and grow abroad

Milan, 25 June 2015

The board of directors of GreenItaly1 S.p.A. (“GreenItaly1”), the first special purpose acquisition company (SPAC) dedicated to green economy, listed on Borsa Italiana’s AIM Italia, has approved the business combination (“Business Combination”) which will lead to the merger between GreenItaly1 and Prima Vera S.p.A. (“Prima Vera”). The two-staged transaction comprises (i) the partial acquisition of Prima Vera, the leading Italian player in energy efficiency and in integrated energy management solutions and (ii) the reverse merger of Prima Vera into GreenItaly1.

Matteo Carlotti, Chairman of GreenItaly1, stated: “We are extremely pleased of the target we picked since being the leading firm in the energy efficiency industry, which entails attractive growth opportunities. Through this transaction we will be able to let our investors join a clearly-defined project with precise strategy, well-rounded management and effective and lean business model, showing remarkable track record of growth and high visibility in terms of backlog going forward”.

Domenico Catanese, founder and Chairman of Prima Vera, stated: “The transaction with GreenItaly1 embodies a crucial step for Prima Vera growth trajectory, with the two-fold aim of keep growing in Italy and successfully competing in foreign markets. GreenItaly1 represents the ideal sweet spot to raise capital in order to accelerate consolidation of our leadership and strengthening our competitive stance. That may be better achieved through a supportive shareholder base made by institutional investors”.

About the parties

GreenItaly1 was admitted to trading on AIM’s Italia platform on 27t December 2013. GreenItaly1 raised €35m and is the first SPAC entirely dedicated to green economy. The SPAC was promoted by (i) Mr. Matteo Carlotti, former sponsor of SPAC Made in Italy 1, (ii) Vedogreen S.r.l., firm under IR Top Group specialized in financing green firms and (ii) Idea Capital Funds s.g.r. s.p.a. the Gruppo DeA Capital/De Agostini private equity arm.

Prima Vera, founded in Milan in 2000, is a key operator in Italy for both energy efficiency and energy services for complex structures. It offers integrated energy management solutions through the planning, engineering and financing of energy improvement projects with high technological content (cogeneration, trigeneration and district heating). Also, Prima Vera provides handling and maintenance of machinery and services related to energy-consuming facilities. These solutions allow to reduce pollution and optimize cost.

Since 2002 Prima Vera has been also operating its Biomedical division, which is focused on managing and preserving the biomedical equipment in laboratories.

At the end of 2014, Prima Vera was awarded a relevant international tender for operating as an Energy Service Company (ESCO) in the efficiency improvement of all Israeli public hospitals.

In the same year, Prima Vera also started an international partnerships in North America, which represents a further lever for growth.

Key financial figures of Prima Vera (accounted for under Italian GAAP):

  • Sales of €96.1m with 2009-2014 CAGR equal to 15,3%;
  • EBITDA of €13.6m and EBITDA margin of 14,2%;
  • Shareholder’s equity of €22.3m;
  • Net debt of €4.7m;
  • Highly visible backlog growing at sustained pace.

Key transaction highlights

Today GreenItaly1 and Prima Holding S.r.l. (“Prima Holding”), which holds 100% of Prima Vera, signed a master agreement defining timing and terms for executing the Business Combination. This includes, inter alia:

  • Acquisition by GreenItaly1 of a minority stake in the share capital of Prima Vera up to a maximum of 8.6%, for a corresponding amount of approximately €8m, provided that (1) equity value for 100% of Prima Vera is equal to €93m and (2) no GreenItaly1 shareholder will be withdrawing or that under any circumstance the total value of GreenItaly1’s shareholders withdrawing shall be lower than €5m.
  • Reverse merger of Prima Vera into GreenItaly1 based upon the valuation of €93m. The company name will change from GreenItaly1 S.p.A. to Prima Vera S.p.A.

The merger plan approved by the board of directors implies an exchange ratio determined as follows: Prima Holding will be attributed 186 shares of GreenItaly1 (125 ordinary shares, 58 redeemable shares and 3 performing shares) for every 10 ordinary shares of Prima Vera, plus a cash component.

Deloitte & Touche S.p.A., has been appointed by the Court of Milan to release the fairness opinion on such exchange ratio (expected to be released in the first half of July).

Reference balance sheet statements according to the article 2501-quarterc.c., are obtained by the financial statements as of December 2014, of Prima Vera and GreenItaly1 respectively.

Following the merger, Prima Holding will hold a stake in the combined entity (the “Combined Entity”) ranging from 69% to 75%, depending on percentage of GreenItaly1’s shareholders withdrawing.

Redeemable shares will range from 21.6% to 23.7% of the Combined Entity share capital merger. These shares will not be publicly traded, will have voting and dividend rights attached and will be transferable only upon conversion into ordinary shares. Conversion will occur at par in three tranches following the approval of financial statements as of 31 December 2015, 31 December 2016 and 31 December 2015, consistently with the bylaws of the Combined Entity.

Performing shares will account for 1.1% – 1.2% of the Combined Entity share capital and will be attributed solely to Prima Holding. These shares will not be publicly traded, will have voting and dividend rights attached and will be transferable only upon conversion into ordinary shares. Conversion will occur based on an exchange ratio of 25 ordinary shares for every 1 performing share converted, as certain thresholds in terms of GreenItaly1’s ordinary share price are met (€12.00 in the first 12 months and €13.50 between the 25th and the 36th month and €15.00 between the 36th and the 48th month), consistently with the bylaws of the Combined Entity.

The precise stake owned by Prima Holding in the Combined Entity will depend upon the number of GreenItaly1 shareholders not approving the merger plan and withdrawing under Article 2437 c.c.

Under Article 15.3 of GreenItaly1 bylaws, the resolution of the Extraordinary Shareholders’ Meeting approving the merger plan is subject to exercise of withdrawal rights by the shareholders not exceeding 30% of the share capital of GreenItaly1. Opt-out value of the ordinary shares will be announced according to the terms and conditions set forth by GreenItaly1 bylaws and, as such, at least 15 days before the date set for the Extraordinary Shareholders’ Meeting in charge approving the Business Combination.

In order to confer stability to the shareholder base of the Combined Entityt, Prima Holding will undertake a 24 months lock up period in relation to both ordinary shares servicing the exchange ratio and ordinary shares issued following conversion of redeemable and performing shares.

Prima Holding has agreed to set up a mechanism, which will ensure the shareholders of the Combined Entity a benefit – through the reduction of its own stake represented by redeemable shares – in case the Combined Entity will not achieve the target net profit of: (i) €4.8m at 31 December 2015; (ii) €5.3m at 31 December 2016; (iii) €6.3m at 31 December 2017. In addition, should those targets not be met, the Combined Entity will be entitled to redeem wholly or partially, one third of the redeemable shares issued, in proportion to the negative difference between actual net profit and target net profit.

The Combined Entity, in consideration of its size, intends to move from the “AIM Italia” to the “Mercato Telematico Azionario”.

The Board of Directors of the Combined Entity, starting from the date of the merger, will be made of n. 8 (eight) members, of which:

  • n. 5 (five) Directors appointed by Prima Holding;
  • n. 2 (two) Directors appointed by GreenItaly1’s promoting shareholders;
  • n. 1 (one) Director having independence requirements under Article 148, subparagraph 3, of the Legislative Decree n. 58/1998 as required by Article 147-ter, subparagraph 4, of the Decree, jointly designated from GreenItaly1 and Prima Vera.

The merger requires the lawful possibility, for the Combined Entity to succeed in on-going business concern to Prima Vera, with respect to contracts and reference industries, to be validated by 15 December 2015.

***

The transaction is a reverse take-over under Article 14 of the “AIM Italia” Issuer’s Regulation, which therefore, presupposes the issuance of the Nomad’s certificate, which is instrumental to publish the prospectus.

***

Intermonte, who acted as Global Coordinator in the GreenItaly1’s IPO, was the Nominated Adviser.

GreenItaly1 has been assisted by Rothschild S.p.A.

Prima Holding and Prima Vera has been assisted by Vitale & Co. S.p.A.

K Studio Associato and KPMG S.p.A. carried out tax, legal, HR due diligence and accounting due diligence, respectively, on Prima Vera on behalf of GreenItaly1.

Value Partners has performed the business due diligence on behalf of GreenItaly1.

IR Top Consulting was the investor & media relations advisor.

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