Lone Star Funds, a private equity firm, is reportedly considering strategic options for Evoca Group, the Italian company known for manufacturing Gaggia espresso machines, which are popular in cafes and restaurants. The potential moves include a sale of the company or an initial public offering (IPO) that could value Evoca at approximately $1.5 billion.
This consideration comes after Evoca garnered significant takeover interest from both private equity firms and businesses within the food industry. Lone Star has engaged Deutsche Bank to explore these options. Evoca, founded in 1924 and headquartered in Bergamo, Italy, is a leading global manufacturer of vending and professional coffee machines, owning several brands including Necta, Wittenborg, Saeco, and Gaggia. The Gaggia brand, known for inventing the first espresso machine with cream on top in 1938, currently accounts for less than 10% of Evoca's total sales.
Evoca boasts a global presence with over 10,000 customers, 1,800 employees across more than 100 countries, 8 production bases, 6 R&D centers, and over 600 registered patents. In the last year, the company reported sales exceeding $400 million and core profits around $95 million. CEO Andrea Zocchi has acknowledged the company's growth, stating that coffee machine manufacturers are benefiting from increased global coffee consumption, and revealed plans to launch five new Gaggia-branded machines next year, targeting international expansion, particularly in the United States. The transaction process is estimated to take two to three months, although Lone Star might ultimately choose to retain Evoca in its portfolio.
Evoca has expanded through several acquisitions in recent years, including Spain's Quality Espresso and Canada's Les Entreprises Cafection. In 2016, it acquired Saeco Vending and the license for Saeco and Gaggia brands in the professional coffee machine market from Royal Philips. This strategic review by Lone Star is set against a backdrop of significant M&A activity in the coffee industry, exemplified by Coca-Cola's $5.1 billion acquisition of Costa Coffee and Nestlé's $7.15 billion deal for Starbucks' packaged coffee and tea distribution rights.
