Fortune Fountain Capital acquires Baccarat for €164m

As per the terms of the transaction, China-based family office FFC is acquiring around 88.8% of Euronext-listed entity Baccarat at the price of €222.70 per share, representing a purchase price of around €164m ($185m). The investor is acquiring the shares from previous investors L Catterton (formed by the merger of LVMH and Catterton in 2016) and Starwood, which respectively owned around 22% and 66.5% of the company's capital. 

Closing of the block purchase will be followed by a mandatory tender offer for all the remaining Baccarat shares, which will be subject to the same pricing.

Daniela Riccardi, who was appointed CEO in 2013, will continue to lead the group. Baccarat's current hotel licence agreement with Starwood's affiliate Groupe du Louvre (which it acquired in 2005), will meanwhile be maintained within the framework of a partnership between Baccarat, Fortune Fountain and Starwood Capital Group. The license to operate and brand Baccarat hotels is retained by Groupe du Louvre.

The transaction is subject to regulatory approval in France and China. If approved, it will enable Baccarat to accelerate its international expansion, particularly into the Chinese and Middle-Eastern markets. FFC specified it would make sure to maintain the crystal maker's "made in France" identity. Finally, the investor said it could expand the company's offering into new segments of the luxury market.

Previous funding
In 2005, Starwood acquired luxury hotel group Groupe du Louvre, thereby also becoming the majority owner of Baccarat.

In 2012, L Catterton invested €27.5m in Baccarat by way of a capital increase. Following the transaction, Starwood owned 66.5%, while L Catterton increased its stake to 22%.

Company
Launched in 1764, Baccarat is a French luxury brand producing fine crystal glassware used for jewellery, lighting, tableware and ornament products. The business has an artisanal manufacturing plant based in Baccarat, in France's Grand Est region.

Baccarat also owns two museums in Baccarat and in Paris, and manages the Baccarat Hotels high-end hotel chain. The group distributes its products worldwide. It had sales of €148m in its most recent financial year with EBITDA of €13m.

People
Starwood Capital Group – Steve Hankin (managing director).
L Catterton – Michael Chu (managing partner).
Fortune Fountain Capital – Coco Chu (chair).

Advisers
Vendor – Messier Maris & Associés (legal); Davis Polk & Wardwell (legal).
Equity – Clifford Chance, Thierry Schoen, Aline Cardin, Xavier Petet, Fabien Goudot (legal); Societe Generale (corporate finance).

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