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Privalia buys Dress for Less; enters German market
Mar '11
Privalia Venta Directa, S.L., the leading private online sales club with market leading positions in Spain, Italy, Brazil and Mexico, is pleased to announce it has agreed to acquire 100% of Dress for Less ("DfL"), one of Germany's leading online clothing and apparel retailers from Palamon Capital Partners, a pan-European private equity firm.

Dress for Less was founded in 1999 and operates a distribution platform in the open site, discount and full price segments. It has more than 500,000 active customers and a total customer base of 1 million in more than 50 countries worldwide.

The acquisition will be funded through a combination of EUR88 million of new equity provided by General Atlantic LLC ("General Atlantic"), a leading global growth equity firm, Highland Capital Partners LLC ("Highland Capital Partners"), Index Ventures LLP ("Index Ventures") and Insight Venture Partners ("Insight Ventures Partners"), a debt facility and shares. As a result, the founders of DfL and managing partners Mirco Schultis and Holger Hengstler will become significant shareholders in Privalia.

This acquisition marks Privalia's first entry to the German market, and follows the Company completing a EUR70 million ($95 million) financing in October 2010 which was one of the largest capital raises in the private online sales sector globally. The previous financing was conducted to enable the Company to expand its leadership into new markets organically and through acquisitions. It was supported through equity investment by General Atlantic, Index Ventures and Highland Capital Partners.

Privalia was founded in Barcelona, Spain in 2006 by Lucas Carne and Jose-Manuel Villanueva and is the market leader in each country in which it currently operates: Spain, Brazil, Italy and Mexico. Privalia announced in February 2011 sales growth during 2010 of 140.6% to EUR168.4m. During 2010, Privalia started its Mexico operation, sold 8 million items and at the end of 2010 had over 6 million members. Privalia forecasts global triple-digit growth and combined sales in the region of EUR400 million in 2011.
Privalia was advised on the transaction by Jefferies International Limited, the global securities and investment banking firm and legal advisers Garrigues and Ashurst.

Commenting on the acquisition, Lucas Carne and Jose-Manuel Villanueva, Co-Founders of Privalia said:

"We are pleased to have agreed to acquire Dress for Less, a leading online retailer in Germany, the biggest and fastest growing economy in the EU. There are significant strategic and operational synergies in this partnership. This acquisition brings a significant geographic expansion, a leadership position in Germany and expands the Privalia business model, providing Privalia with a large and effective channel for the private sales return stock.

"Dress for Less is a quality business and we are delighted that Mirco Schultis and Holger Hengstler and their teamare going to stay with the enlarged Group to continue to grow the business.

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