Fund made up of more than 60 individuals is now calling the shots

02/12/2024

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The fund paid R$15 million for the asset and took on a debt of R$45 million — Foto: Silvia Costanti/Valor

SouthRock asset manager took Eataly out of the court-supervised reorganization process at the end of last year and has now decided on the sale of the business. Pipeline, Valor’s business website, learned that the Wings fund has taken over the operation and is now renegotiating with suppliers and other creditors.

As it was reported by the website when conversations began, the fund is comprised of just over 60 individuals, including physicians, advertisers, and accountants, and now also a multi-family office. With no experience in the food industry, Wings investors brought to Eataly’s management Marcos Calazans, an executive who had previously tried to acquire the asset.

Panza&Co, then the owner of Café Suplicy, Fifties and P.F. Chang’s, submitted the acquisition of Eataly to antitrust regulator CADE in February 2022, but was overrun by SouthRock in the final stretch, while it was structuring the transaction. In August of that year, SouthRock’s CEO Ken Pope announced the acquisition. (Due to the pandemic, Panza&Co closed the other brands’ operations.)

Mr. Calazans took over as the CEO of the operation, which was then held by Luis Felipe Campos. The negotiations around the sale were carried out by SouthRock’s CFO, partner Fabio Rohr—Mr. Pope did not participate in the conversations, even though he signed all the paperwork, according to a person familiar with the matter.

The fund paid R$15 million for the asset and took on a debt of R$45 million. The size of the debt is impressive, considering that it is only store in Brazil. But, according to sources, only around R$15 million refers directly to the operation, as its inventory.

The total amount also includes outstanding taxes and royalty payments to the Italian parent company, which the new owners must renegotiate. Bank loans, with institutions such as Pine and Santander, have already been paid off. A source close to the fund says there is a lot of work to be done to recover and expand the store, but that there are issues, and several initiatives have been identified for the action plan.

One of the obstacles that the new owners will have to overcome is that the company has filed for bankruptcy, as reported by Valor. According to a source close to the fund, Winebrands is one of the smallest creditors among beverage suppliers, with around R$80,000—Mistral, for example, would have R$500,000—, but an agreement is expected. However, Winebrands states in the documents that Eataly has 634 notarial protests and recent debts with suppliers alone totaling R$8 million.

At the end of 2022, there was also a change in Eataly’s headquarters. European private equity fund Investindustrial bought control of the operation from founders, the Farinetti family.

In Brazil, the sale by SouthRock was signed before the approval of the court-supervised reorganization of the controlling company and other companies in the group. Although Eataly was not part of the process, the bankruptcy trustee defined, after approval, that the companies under reorganization could not sell shares.

The main asset in SouthRock’s reorganization process are the Starbucks stores—the U.S. brand has terminated its contract, but open units continue to carry the brand’s name.

The original story in Portuguese was first published on Valor’s business news website Pipeline.

*Por Maria Luíza Filgueiras, Adriana Mattos — São Paulo

Source: Valor International

https://valorinternational.globo.com/