Transaction Overview
A listed Chinese company has completed a transaction in the European robotic sector. European robotics and advanced manufacturing technologies stark increasing interest in Chinese companies. Saimo Electric Co., Ltd. (a Chinese A-share listed Company) recently closed the transaction to join the capital of Italian automation equipment manufacturer EPISTOLIO S.r.l., as a minority player. As part of the agreement, both parties will contribute capital to establish a JV in China to tap into the Asian market.
Seta Capital was engaged as the exclusive sell-side financial advisor in this transaction.
SME Strategy
Headquartered in Varese, Italy, Epistolio S.r.l is a local, family-run European SME (Small-Medium-Enterprise) with impressive potential for expansion. Its main products include 6-axis painting robots, gravimetric dosing systems and other automation equipment and components. The company has an extensive Research and Development department, which lead to core technologies in the design and manufacturing of robots, as well as gravimetric dosing systems. Its products are widely used in automotive, aerospace, furniture, construction materials and other industrial sectors. Clients of Epistolio include Airbus, Fiat, Costa Crociere and Ferretti, amongst many other prestigious names.
Strategy of the Buy-side
Saimo Electric’s strategic goal of transaction is to strengthen its capability in order to provide 360 degree intelligent manufacturing solutions to its clients, and to increase market presence in automotive and consumer electronics. Saimo’s strategy is to establish a global footprint. Saimo will invest alongside the seller to establish a JV company in China in order to create synergies leveraging on resources and advantages of each. This strategic collaboration will boost Saimo’s business in intelligent manufacturing, as well as provide access to the international market.
Review of Chinese outbound investment in robotics
Many Chinese companies have adopted the strategy to globalize and to enhance their technological competitiveness by joining forces with companies oversea. In 2013, the Chinese market has become the largest robotics industry in the world, and since then we have witnessed multiple investments of robotics companies by Chinese firms. The list below is a summary of robotics companies that have allowed Chinese investors in their capital in the recent years.
Target |
Buyer |
Date |
Transaction Value |
Main products of the target |
|---|---|---|---|---|
Epistolio (Italy) |
Saimo Electric Co., Ltd. |
June 2017 |
Undisclosed |
Painting robot & gravimetric dosing system |
RR Robotica (Italy) |
Shanghai Turin Robot |
October 2016 |
Undisclosed |
Palletizing Robot |
Gimatic (Italy) |
AGIC Capital |
June 2016 |
Around EUR 100M |
Robot arm Equipment |
KUKA (Germany) |
Midea Group |
May 2016 |
EUR 4.5B |
Industrial robot |
Evolut (Italy) |
EFORT Intelligent Equipment Co., Ltd. |
March 2016 |
Undisclosed |
Welding Robots |
SMD (UK) |
CSR Corporation Limited |
April 2015 |
Undisclosed |
Deep-sea operation robot |
DMW (USA) |
Hubei Huachangda |
February 2015 |
USD 53.5M |
Logistic robot |
Scape (Denmark) |
Shenzhen Maxonic |
January 2015 |
DKK 6.5M |
Automation Equipment |
SIR (Italy) |
Wolong Electric Group Co., Ltd |
December 2014 |
EUR 17.8M |
Industrial robot |
CMA (Italy) |
EFORT Intelligent Equipment Co., Ltd. |
November 2014 |
Undisclosed |
Painting robot |
Europe is the forerunner in the advanced manufacturing sector and home to many small to medium size companies with innovative and competitive technologies. Northern Italy is a traditional manufacturing power house in the region and has proven to be more open towards collaborating with Chinese companies in the past few years compared to its European peers, such as Germany, Switzerland and France. In fact, Italy has seen one largest capital inflows from China in Europe, and is ranked first in terms of transactions regarding robotics companies, as shown in the table above.
Outbound investment + JV in China
Establishing a Joint Venture in China following an outbound investment is a tactical strategy. For both parties it is a concrete manifestation and practical vehicle to achieve their strategic goals. Many European family businesses realize the importance of the Chinese market, however, the lack of financial strength as well as human resources prevents them from entering the market. By establishing a Joint Venture alongside allowing Chinese investors in the company’s equity, they are in the position to rely on the local resources of the Chinese partner, therefore able to create synergies more effectively. On the other hand, such an arrangement creates a deeper bond between the two parties of the transaction by providing an implied option for the seller to benefit from the future growth, thus better aligning the interests of both parties.
About Seta Capital
Seta Capital has been engaged by the Italian company as its exclusive advisor in this transaction. Seta Capital has assisted the seller in setting its strategy, identifying and selecting suitable potential investors, arranging and coordinating due diligence, negotiating transaction terms and conditions, and assisting in the closing procedures. Seta Capital specializes in cross-border corporate investments, M&A, partnerships, and corporate strategy between Europe and China. Based in Milan, Shanghai, Hong Kong and Munich, Seta Capital has proven execution capabilities and has an extensive network to bridge Asian and European markets. Along with its financial advisory capabilities, Seta Capital's team of engineers constantly monitor manufacturing and industrial sector developments in Europe and China. The team’s objective is to to detect every opportunity as it arises, while supporting companies and entrepreneurs to leverage their own technology.