Successful Operational Turnaround 2010 to 2012
Company Overview
O&G pipe coating supplier comprised of 9 companies, including 2 publicly listed entities in Italy and Argentina
Strategic partnerships with Tenaris (NYSE: TS), Shawcor (TSE: SCL) and 4DGEA (Paris based O&G PE fund)
15 manufacturing facilities around the globe; #1 player in thermal insulation worldwide; headquartered in Argentina and Italy, with JVs in Brazil and the US and subsidiaries in Qatar, Angola, Nigeria, China, Venezuela, Spain and Australia
Investment Summary
Acquired 95% of Socotherm Group at an implied equity value of ~USD65 million
Executed operational turnaround across global operations, expanding sales by 2.5x
Sophia partners assumed executive positions and managed the group
Exited in 2012 at 2.4x the entry valuation
Key initiatives: reorganized the group structure, strengthened management teams, redefined compensation programs, reduced workforce by 25%, revamped commercial strategies, sold non-core assets and delisted two publicly traded subsidiaries
Sophia Capital
Owned and operated the Socotherm Group
Highlights
Socotherm (“SCT”) was the world’s second largest O&G pipe coater
- Leader in the higher-margin off-shore segment
- Partner and supplier of Tenaris and strong relationship with O&G majors
- Core business in USA, Italy, Argentina and Brazil, with production facilities also in Australia, Spain, West Africa and Venezuela
Acquisition
- Sophia positioned itself as a trustworthy independent buyer
- Funded this acquisition with our family office, 4D (a European O&G institutional investor), and Shawcor Ltd. (TSX listed, #1 coating company in the world and SCT’s main competitor)
- Sophia had control of the operation