Ermenegildo Zegna to Go Public at $3.2 Billion Valuation | News & Analysis

Ermenegildo Zegna to Go Public at $3.2 Billion Valuation | News & Analysis

Ermenegildo Zegna is set to go public by combining with a New York-listed special purpose acquisition company (SPAC) in a deal that values the Italian luxury company at $3.2 billion.

Ermenegildo Zegna is going public by combining with a New York-listed special purpose acquisition company (SPAC) in a deal that values the Italian luxury company at $3.2 billion. Zegna is set to raise $880 million through the deal, while its founding family will remain controlling shareholders with a 62 percent stake in the combined entity.

Zegna, which is known for its high-end suiting and silk polo shirts, acquired the Thom Browne label at a $500 million valuation in 2018 in a bid to beef up its scale (and broaden its customer base) at a time when big conglomerates like LVMH and Kering were expanding their grip on the sector. The high degree of investment by those groups and by independent “megabrands” like Chanel and Hermès has made it harder for small and mid-sized luxury companies to grow.

By going public now, Zegna will gain investment firepower to bounce back from the pandemic as an independent company and explore making additional acquisitions.

Zegna’s revenues fell 23 percent to €1.05 billion ($1.24 billion) last year.

Other players in Italy’s fashion sector have been adding brands to their portfolios lately. Moncler struck a deal to acquire Stone Island last December. This March, Diesel- and Margiela-owner OTB bought Jil Sander, while the Agnelli family that controls Ferrari took a stake in Christian Louboutin.

Zegna’s deal came together using an increasingly popular transaction vehicle called a SPAC, whereby fund managers or sector experts looking for investment opportunities create a shell company to raise investment from the public markets, then merge that shell with another company, thereby taking it public. Zegna is merging with a SPAC created by the private equity group Investindustrial and chaired by Sergio Ermotti, the former chief executive of the Swiss bank UBS.

Stay tuned for BoF updates to this developing story.

Related Articles:

What a Wave of Italian M&A Means for Fashion

Zegna Trims Hopes for Full Recovery in 2021

Zegna and Fear of God: What the Merger of Suiting and Streetwear Says About the Men’s Market

Alessandro Sartori’s Plan for Zegna

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