Arroweld Italia

Presentation of the company

Created in 2006, Arroweld Italia S.p.A. is active in the distribution of industrial products sector. The company, managed by Mirco Giorgio Gasparotto, has 277 employees and is based in Zané (Italy).

The company’s main activities are:

• Distribution of welding products;
• Distribution of measuring and control systems and industrial tools.

The company works with large clients active in the automotive, construction and energy business and with several dealers.

The Company has a strategy to further increase its market share by acquiring some distributors of welding products.

Project Description

The company wishes to borrow 2 000 000 € over 48 months to finance the acquisition of the uderlying business from some small distributors. This project will be realised by the end of the year.

As a reminder, the Lendix lending community supported ST Protect S.p.A. which is a subsidiary of Arroweld Italia S.p.A. in June 2017 and November 2017 for a total amount of 750 000 € to finance the acquisition of new orders.

This project is not covered by the Italian state guarantee.

The amount offered on the platform is limited to 980 000 €, which is in line with the regulatory limits.

Like all projects presented to private lenders on Lendix, it is co-financed with institutional investors, sophisticated investors and the management of Lendix, subscribers to the Lendix Fund.

Analyst’s Opinion

The borrower is the main operating company representing 40% of the group’s turnover and 60% of the profitability. The financial analysis was carried out on the consolidated financial statements, which reflects the group’s performance.

With a turnover of 77 489 000 € in 2017 and an experienced team, the company has a good track record combined with a two-digits operating margin.

Variation of turnover and profitability is related to a change in consolidation perimeters and a strong investment in a digital project. The forecast is based on the performance of 2017 taking into account activity of the first semester of 2018.

The borrower has a correct repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,14 and a good financial structure, with a forecast net debt / ebitda ratio of 2,88 and a net debt / shareholder equity of 144%.

Total debt has been adjusted as part of the clients portfolio is insured.

The analysis of the project leads to a credit rating of B and a 6,5% annual interest rate.

Strong Points:

• Good historical performance based on diversified client base;
• Correct repayment ability with a forecasted FCCR of 1,14 reinforced by the support of shareholders;
• Market leader in the welding industry.

Points of Caution:

• High level of inventory.

*The multiple of FCCR at 1,14 means that the company has a safety margin of 14 % relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (ModeFinance, Crif, Cerved). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.