Italian private equity buys fashion label Cavalli

01 May '15

2 min read

Italian private equity fund Clessidra has acquired control of fashion house Roberto Cavalli for an undisclosed sum. Clessidra now has a majority stake in Cavalli and together with minority co-investors private equity firm L-GAM and Chow Tai Fook Enterprises Ltd, a Hong-Kong based holding company controlled by the Cheng family, it will own 90 per cent.90 per cent equity stake, according to media reports.

It marks the end of one of the longest takeover bids.

Clessidra, which has invested in jeweller Buccellati, held discussions with Cavalli back in 2008 and 2009 and since then, talks had been on and off with other private equity firms including Permira, Investcorp and Russia’s VTB Capital.

Sticking points included valuation but also getting licensees to back a deal, sources close to the matter said.

Roberto Cavalli, the 74 year-old founder of the brand known flamboyant animal design prints, will 10 per cent stake. The company increased its consolidated turnover to approximately 210 million euro last year.

Two sources said the deal valued Cavalli at around 390 million euros or 16 times core earnings, but the final price tag was not set since there was an earnout clause.

Another source said the price paid was well below the 18 times underlying earnings of 25 million euros Permira was reported last year to have offered for the brand.

"In five years from now, we aim to be in a different league," said Francesco Trapani, former boss of Bulgari and head of watches and jewellery at LVMH, who will become Cavalli's chairman, the reports said.

Founded in Florence in the 1970s, Cavalli today runs around 200 stores. (SH)

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