March 3, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
Gianni Versace SPA, the high-end Italian fashion company, announced plans to sell a 20 percent stake in the company to U.S. private equity firm Blackstone Group for a combination of cash and stock. The deal is the latest example of strategic and private equity buyers taking advantage of the growing demand for consumer luxury goods in the high-end fashion sector.
Under the terms of the deal, Blackstone will provide the fashion company with €150 million in capital and will acquire €60 million in stock from GIVI Holding SpA, the holding company that controls Versace. The deal values Versace at approximately €1 billion, or $ 1.37 billion.
Blackstone will obtain one seat on the Versace board, but the Versace family will retain majority ownership and board control of the company.
The company will use the capital from the sale to expand its retail network in existing and emerging markets. According to Blackstone, the investment will also “enable Versace to bring forward plans to further develop the company’s portfolio of brands, in particular Versus Versace, as well as its product offerings, with a specific focus on accessories, and enhance its e-commerce business.”