Carlyle buys stake in Investindustrial-backed design group

Carlyle and Investindustrial will own equal stakes in the new group, and will invest alongside the founders of B&B, the Busnelli family, and Flos, Piero Gandini, who will both retain minority stakes. The three companies will continue to operate independently under their brand names.

To finance the deal, Carlyle deployed capital from its Carlyle Europe Partners funds in addition to a debt package of an undisclosed amount, Unquote understands. The firm has recently registered a new vehicle in Luxembourg, Carlyle Europe Partners V. Its predecessor, Carlyle Europe Partners IV, held a final close on its €3.75bn hard-cap in July 2015.

The GPs intend to create a global high-end interior design group able to bring together a collection of complementary brands. Following the merger, they plan to pursue further acquisitions in adjacent niches of the high-end interior design market. They expect the group to reach combined sales in excess of €500m in 2018.  

Following the deal, Piero Gandini, CEO of Flos, will be appointed chair of the new group, while Giorgio Busnelli, B&B Italia's chair, will become vice-chair.

Flos made three bolt-ons under Investindustrial's ownership, including the acquisition of outdoor lighting specialist Ares. Meanwhile, its other portfolio company B&B acquired high-end kitchen manufacturer Arclinea and furniture designer Azucena.

Previous funding
Investindustrial acquired a majority stake in Flos, an Italy-based designer and producer of residential and commercial lighting products, in 2014. The comapny's founders, the Gandini family, retained a significant stake in the company and, alongside other shareholders, remained involved in the decision-making process.

Subsequently, Investindustrial bought a majority stake in B&B, a furniture designer for the residential, retail and corporate markets, in June 2015. The GP drew capital from its Investindustrial V fund, a €1.25bn vehicle raised in 2011. Natixis, Banca IMI and UniCredit acted as lead arrangers in providing a debt package to support the transaction. The company's founder and CEO Giorgio Busnelli retained a minority stake of approximately 20%.

Investindustrial acquired Danish architectural lighting supplier Louis Poulsen from Polaris Private Equity in a secondary buyout inked in June. The company was sold at an enterprise value of DKK €1.5bn, according to local press reports.

Company
Established in 1962 and headquartered in Brescia, Flos is a designer and manufacturer of lighting products for residential and commercial customers. The company also has operations in Ribarroja, near Valencia, and exports to 94 countries worldwide. It is present globally through single-brand showrooms and stores in Milan, Rome, Paris, New York, Tokyo, Hong Kong, Singapore, Lyon, Amsterdam, Copenhagen, Oslo and Stockholm. Its client base includes Hugo Boss, Nespresso, Giorgio Armani and Dior.

In addition to its commercial operations, Flos's products have featured in art and design museums including the Museum of Modern Art in New York and the Victoria & Albert Museum in London. It has partnerships with designers including Philippe Starck and the Castiglioni family.

Founded in 1966 as Cassina & Busnelli and headquartered in Novedrate, near Como, B&B is a furniture designer focusing on the residential, retail and corporate markets. The business employs 480 people, has nine flagship stores located in Washington, Dallas, London, Paris, Munich, Milan and New York, and a distribution network across 80 countries. It generated revenues of €185m in 2017, of which 80% came from exports.

Established in 1894, Louis Poulsen manufactures and sells lighting fixtures for both indoor and outdoor use to private consumers and professionals. The company is headquartered in Copenhagen with production facilities in Vejen and employs 455 people, including 300 based in Denmark. It recorded turnover of DKK 801m in 2017.

Louis Poulsen has a distribution network in 50 countries worldwide and dedicated showrooms in Copenhagen, Stockholm, Miami, Helsinki, Vejen, Oslo, Los Angeles, Singapore, Tokyo and Dusseldorf. In addition, three new showrooms will be opened soon in Milan, London and New York.

People
Investindustrial – Andrea Bonomi (chair).
Carlyle Europe Partners – Marco De Benedetti (managing director, co-head).
Flos – Piero Gandini (CEO).
B&B Italia – Giorgio Busnelli (chair).

Advisers
Equity – JP Morgan (corporate finance); Lazard (corporate finance); Latham Watkins (legal); Chiomenti (legal).

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