Global law firm Reed Smith has advised Carco SRL, an Italian producer of large diameter fluid sealing solutions, on its sale to UK investment company St George and a cross-border financing to accelerate its expansion into the US. St George acquired Carco through a partial reinvestment by current shareholders as well as funds from Pricoa Capital, the investment arm of US insurance group of Prudential. This is believed to be one of the first financings of an Italian corporate by a private debt fund via an English holding structure.
A Reed Smith team led by counsel Monica Dupont-Barton advised Carco and its management on several aspects of the transaction. Prior to the acquisition, a complex tax structure was set up by Caspar Fox in order to move the holding structure of the group from Italy to England and to construct a US holding structure to be used for future expansion in the US. The Reed Smith team worked with PWC to devise a tax efficient structure across Italy, England and the US.
The financing provided by Pricoa (the lending arm of Prudential) via an English law private placement provided the funding for the acquisition of the Italian group and future acquisitions in the US (the first of which will complete in August 2015).
Reed Smith counsel Monica Dupont-Barton commented:
“This was a very complex European private placement including three jurisdictions (Italy, UK and New York). We were able to utilise our cross-border transactional capabilities and our expertise in hybrid US/European financings to complete the deal for new client Carco within a very tight deadline.”
The full Reed Smith team included finance counsel Monica Dupont-Barton and partners Caspar Fox (on tax aspects) and James Cross (on corporate aspects) in London; as well as finance partners Ben Davis and Fernand Arsanios (on New York law). Carco was also advised by Medit debt advisory.
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Carco was established in early 1900. The company serves a wide range of sectors such as marine, energy, oil and gas, heavy industrials, and heavy constructions. In recent years, Carco has been experiencing strong growth, including the opening of subsidiaries in the US, Germany, France and Asia.