BEVERLY HILLS, Calif. – Earlier this year, Platinum Equity employees gathered for an elevated happy hour, featuring the Fantini Group.
The Italian wine producer and Platinum Equity portfolio company presented a tasting experience with its award-winning wines, the firm’s third portco day where portfolio companies are invited to demonstrate products and technology. It is part of a program that brings the firm’s diverse portfolio to life and provides a way to engage with employees through a shared learning experience.
This portco day was also a continuation of a similar event held in Europe last year. The London headquarters event was led by Co-President Louis Samson, and both events offered an opportunity for Platinum Equity executives to explain the thesis behind the 2020 investment, highlight the work of company co-founder, Valentino Sciotti, and recognize the firm’s deployment of resources to the European market.
The events also provided chances to simply taste good wines.
“One day in 2019, on a Monday morning call, we’re just going through these different deals that are coming through and I’m hearing about this company which had critical mass in a market where there really wasn’t a ton of critical mass, and we had this vehicle in our Small Cap Fund that could actually address the size of the company,” Samson said.
“What we got with Fantini was everything we fell in love within the California (wine industry), plus scale, plus the Italian taste.”
Increasing employee engagement, awareness
At the recent event, employees in the Beverly Hills headquarters partook in a selected array of charcuterie that paired nicely with the fruity Rosato Merlot as Platinum Equity Partner Bryan Kelln provided an in-depth presentation of the wine’s production, business model and how Fantini Group has progressed since its acquisition in 2020.
The first portco day occurred in 2022 when utility vehicle manufacturer Club Car visited Platinum Equity offices. Kelln, who first broached the possibility of portco days, said they aim to further educate Platinum Equity employees about the portfolio, increase employee engagement and shed light on certain deals.
“Many of us on the deal and ops teams have both the pleasure and obligation to travel around the world to be with our portfolio companies. But some of the people who work in our offices don’t have the opportunity to travel so we’ve decided to bring the portfolio to them and share with our Platinum employees what we’re buying, why we liked the deal and how it’s currently doing.”
Bryan Kelln, Partner, Platinum Equity
“Many of us on the deal and ops teams have both the pleasure and obligation to travel around the world to be with our portfolio companies,” Kelln said during the tasting. “But some of the people who work in our offices don’t have the opportunity to travel so we’ve decided to bring the portfolio to them and share with our Platinum employees what we’re buying, why we liked the deal and how it’s currently doing.”
The Rosato Merlot was one of five wines served by Fantini Group. Employees also learned about the different flavor notes, aromatics and varying grape regions in Italy from local sommelier John Paul Masaryk who explained the difference between Pecorino cheese and Fantini’s Calalenta Pecorino Terre di Chieti wine.
“Pecorino actually means sheep and the cheese comes from sheep’s milk,” Masaryk said. “But they also gave the name to this grape because the farmers would come through all the mountains and the hillsides of beautiful, lush valleys. Sheep would eat these grapes and that’s how it got its name.”
Pecorino is a crisp, refreshing white wine with a strong fruit concentration on the palette.
The presentation helped to create an entertaining and educational afternoon, according to Head of Human Capital Lindsey Calautti said.
“It’s important that employees have the opportunity to come together, hear from senior leadership and increase their awareness on how their day-to-day activities are driving progress for Platinum,” Calautti said.
‘We got enamored with a business model that was asset-light’
Following Kelln’s Beverly Hills presentation, the European panel discussion played on the TV. Samson hosted the event with Sciotti, Senior Vice President Filippo Rossi and Managing Director Fernando Goni. Before turning it over to Platinum Equity Principal, Samson opened the discussion with a brief history of the investment.
Samson said the firm once looked at investing in American wine industries, but the business, which typically is dependent on high capital and Mother Nature, wasn’t a good fit.
“About maybe 15 years ago, we looked at our first wine deal; we didn’t really have a thesis around it,” Samson said. “We learned a little bit about the American market, and we got enamored with a business model that was asset-light, that was getting around the weather constraints, and really putting an emphasis on wine-making and good marketing.
“By the time we fell in love with this business model inside of an industry that is largely dependent on high capital and Mother Nature, our Fund got too big, and these companies were too small.”
But that changed with Fantini Group.
Sciotti explained to the London audience that he developed relationships with winemakers, comparing producers to the chefs who are the main attractions at Michelin-starred restaurants.
“The process of transformation from grapes to wine is the most delicate process,” Sciotti said during the European event. “It’s there that you create quality, which means that when there’s a glass in front of you, I want to see the smile on your face.”
Kelln added: “Fantini doesn’t own vineyards, but they source grapes from all over Italy and then they develop, blend, bottle and distribute the wines all over the world.”
Those are some of the reasons why Platinum Equity, which has steadily grown its resources and support for the Europe market, was attracted to the deal during a late 2019 meeting with bankers in Milan.
Platinum Equity was able to emerge with the deal during a competitive bid process, able to reach an agreement in four weeks toward the end of 2019. But to complete the closing, Platinum Equity had to navigate the initial stages of the pandemic. Without face-to-face meetings, phone calls and video conferencing were the modes of communication. The process demanded strong collaboration between Platinum Equity teams in Beverly Hills, New York, Greenwich and London.
That created a sense of accomplishment when the deal was completed in Milan on March 31, 2020. The firm believes the business is also an operational success story.
“There’s a lot of work that goes into the margins over the last 10 years between winemakers, sourcing, etc.,” Goni said. “Another key is our ability to react to everything that was thrown at us and keep that performance. COVID, inflation, the market, but we have a winning team at Fantini, a great asset.”
“It’s also a vote of confidence to Platinum the way that we apply resources to different industries, different situations, and Fantini is a great example of that.”
