Permira to acquire majority stake in Gruppo Florence

Ero Partsakoulaki
26 May 2023

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UK-headquartered sponsor Permira has agreed to acquire a majority stake in Gruppo Florence, an Italy-based manufacturer providing services to the luxury industry.

The entrepreneurs and the management team behind the company, as well as VAM Investments, will reinvest a significant portion of their proceeds and will remain committed to the project, according to a statement. Fondo Italiano d'Investimento will also retain a minority stake, it said.

Attila Kiss will continue to lead Gruppo Florence as CEO and Francesco Trapani will retain his role as chairman, it said.

The GP invested in the company via its eighth buyout fund, Permira VIII, a source familiar with the situation told Unquote. The fund held a final close on EUR 16.7bn in March 2023, surpassing its EUR 15bn target, Unquote reported.

The fund follows the same strategy as its predecessor, which deployed equity tickets of EUR 250m-EUR 1bn. It focuses on the technology, consumer, healthcare and services sectors, aiming to back businesses with long-term, structural and resilient growth. Its portfolio currently comprised four companies as of March 2023, as reported.

Unquote sister publication Mergermarket reported in December 2022 that Gruppo Florence was looking to select banks and advisors for either a listing or a private sale, noting that Permira was eying the company.

Permira is set to support Gruppo Florence's next phase of growth, consolidating its product and service leadership, it said. The sponsor plans to continue doing M&A in line with its past acquisitive strategy, with a primary focus on Italy, said the source familiar.

The group's industrial project involves significant investments in training, digital tools, and research on sustainable production processes, it said.

The deal, which is subject to customary regulatory approvals, is expected to close in the fourth quarter of 2023.

Permira's consumer portfolio includes Italian fashion house Golden Goose, which it has owned since 2020; Italian tortilla restaurant chain La Piadineria, acquired in 2017; German omnichannel premium fashion retailer BestSecret, which the GP bought in 2016.

Permira has received capital commitments of more than EUR 77bn to date across its private equity and credit strategies.

Permira declined to comment.

Company
Gruppo Florence was founded in October 2020 by a consortium of investors led by VAM Investments, Fondo Italiano d'Investimento (through Fondo Italiano Consolidamento e Crescita – FICC) and Italmobiliare, with the aim of consolidating the luxury supply chain through the aggregation of leading Italian players in the space, to create an integrated platform.

The company has an integrated production hub in Italy serving global luxury brands and is based on a partnership model among the founder entrepreneurs of the 26 companies that joined the company, becoming shareholders in the structure. It provides services ranging from product development to the production of high-end clothing and accessories, shoes and leather goods for luxury brands.

It reached a turnover of more than EUR 600m in 2022 and has more than 3,000 employees operating in 12 Italian regions and collaborating with over 70 international brands.

People
Gruppo Florence – Attila Kiss (CEO).
Permira – Francesco Pascalizi (partner).
VAM Investments – Francesco Trapani (chairman of Gruppo Florence and VAM Investments), Marco Piana (CEO).
Fondo Italiano d'Investimento – Marzia Bartolomei Corsi (senior partner).
Italmobiliare – Carlo Pesenti (CEO).

Advisers
Equity – J.P. Morgan (M&A); Legance (legal); BCG (commercial due diligence); EY (financial due diligence); Maisto e Associati (tax); Latham & Watkins (legal financing).
Vendors − BofA Securities, Citigroup (M&A); DWF, Gianni & Origoni (legal); Bain & Co (commercial due diligence); KPMG (financial due diligence); BonelliErede (tax); UniCredit (financial advisor and equity private placement adviser on VAM Investments' reinvestment process).