Fashion house Versace is said to be looking to sell a stake of up to 20% to help it fund growth in a deal that would value the fashion retailer at more than € 1.2 billion.
The stake that could be sold would be around 15-20 percent and will be sold to a financial, not industrial, partner, according to L:ndon City sources and reported by Reuters earlier today, The aim was to complete the deal by the end of the year.
The stake would be sold through a reserved capital increase of around € 250 million.
The fashion house, whose glittering gowns are worn by stars such as Lady Gaga and Madonna, hired investment banks Goldman Sachs and Intesa Sanpaolo's Banca Imi as advisers in May 2012, fuelling speculation of a sale.
Versace is seeking to strengthen its balance sheet to help fund expansion in overseas markets such as Asia ahead of a possible listing further down the road.
Versace hired Goldman Sachs and Banca IMI last year to explore growth options. Versace expects “double-digit” percentage growth in sales in each of the next three to five years. In 2012, Versace reported Ebitda of € 44.5 million on revenue of € 408.7 million.
Versace has a valuation of about €1.4 billion, based on 32 x Ebitda (when compared with Qatar’s Mayhoola for Investments SPC acquistion last year of Valentino).
Donatella Versace owns 20% of Versace, Santo, her brother 30% and Donatella’s daughter Allegra, a non-executive director, owns the rest.
The need to expand internationally to counter the downturn in home markets has prompted Italian luxury groups such as Giorgio Armani, Roberto Cavalli, Missoni, and Ermenegildo Zegna have been reluctant to sell and are still controlled by their respective founding families.
The strong performance of luxury brands has made them a target for cash-rich buyers seeking recognition as well as returns.
In August Italian newspaper Il Sole 24 Ore said a "teaser" - or data sheet about the company - had been sent at the end of July to some 10 investors potentially interested in the group.
According to several sources, Qatar Holding and FSI, an Italian investment fund owned by state lender Cassa Depositi e Prestiti, could be interested in investing in the fashion house.
Qatar Holding signed a joint venture agreement with FSI last year to invest in Italian companies in sectors including food, fashion and luxury.
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