Leonardo & Co. Advises F.I.L.A.

Leonardo & Co., in association with Houlihan Lokey, is pleased to announce that F.I.L.A. - Fabbrica Italiana Lapis ed Affini S.p.A. (F.I.L.A.) has acquired 100% of the shares of Pacon Holding Company (Pacon) for an enterprise value of US$325 million and US$15 million in tax benefits. The transaction was announced on May 7, 2018, and closed on June 7, 2018.

Established in 1951 and headquartered in Appleton, Wisconsin, Pacon is one of the main players in the North American market for products in the schools and arts & crafts sectors. Its product range, which includes over 8,500 items, is manufactured in eight production facilities located in the United States (three facilities in Appleton and three facilities in Neenah, Wisconsin), the United Kingdom (one facility in the West Midlands), and Canada (one facility in Barrie, Ontario).

Based on management estimates, the transaction will generate significant cost synergies and will lead F.I.L.A. to more than double its consolidated sales in the United States. As a result of the acquisition, the group has 29 production facilities in five continents with more than 9,000 employees.

The transaction has been financed by a medium- to long-term loan underwritten by Mediobanca Banca di Credito Finanziario S.p.A. and UniCredit S.p.A. as global coordinators, bookrunners, and mandated lead arrangers; by Banco BPM S.p.A. as bookrunner and mandated lead arranger; and by Banca IMI S.p.A. and Banca Nazionale del Lavoro S.p.A. as mandated lead arrangers for a total amount of €520 million, including the refinancing of current debt.

The board of directors has also resolved to submit for approval to the general meeting of the shareholders of F.I.L.A. a proposal for a share capital increase by way of rights offering of up to €100 million (inclusive of any share premium), with preemption rights, to be used for the early repayment of the group's debt. Mediobanca Banca di Credito Finanziario and UniCredit Corporate & Investment Banking will act as joint global coordinators and joint bookrunners in connection with the proposed capital increase.

Leonardo & Co., in association with Houlihan Lokey, served as the exclusive financial advisor to F.I.L.A.