Investitori Associati exits La Rinascente

The company was bought by Thai department store operator Central Retail Corporation. Investitori reaped a money multiple of 2.5x and an IRR of 16% on its investment. Prelios made a profit of more than €30m.

The Enterprise Value of the deal was €260m, which represents a sales multiple of 0.7x, an EBITDA multiple of around 6x and an EBIT multiple of around 7x.

Previous funding
Investitori Associati, DBGO, Prelios (then known as Pirelli Real Estate) and the Borletti family acquired 99.09% of Rinascente's textile activities for €888m in March 2005. The shareholding structure was as follows: Investitori Associati (46%), DBGO (30%), Prelios (20%) and Borletti (4%). Following an auction process, the company was bought from Luxembourg-based holding company, Eurofind, a joint venture between IFIL, the holding company for the Agnelli family, and France's Auchan. Italian banks MCC (Capitalia) and UBM (Gruppo Unicredit), along with Natexis Banques Populaires, provided financing for the acquisition.

Investitori's plan was to implement a turnaround strategy to transform Rinascente into a luxury department store operator and strengthen the La Rinascente and Upim brands. To do this, it hired ex-Selfridges CEO Vittorio Radice, refurbished its flagship store in Milan and instigated a "house of brands" concept to create a more exclusive shopping experience. It also acquired new stores in Palermo and Rome, before selling Upim to Coin in 2010 and its flagship store in March 2011.

Company
Milan-based La Rinascente is a luxury department store operator founded in 1865. Its clothing unit consists of two main areas, namely the 19 La Rinascente department stores and the 148 Upim stores, which specialise in medium-to-low priced clothing, home furnishings and perfumes. The company reported an EBITDA of €65m on a gross consolidated turnover of €925m in 2004, which shrunk to €350m by 2010, with an EBITDA margin of around 7%. It employs 1,529 people.

People
Chris Papachristophorou, global head of RREEF Opportunistic Investments, led the exit on behalf of Deutsche Bank. CEO Tos Chirathivat led the purchase on behalf of Central Retail Corporation.

Advisers
Management – Unicredit (Corporate finance).
Equity – Giliberti e Pappalettera (Legal); Citi (Corporate finance).
Purchaser – Clifford Chance (Legal); Morgan Stanley (Corporate finance); Claudio Costamagna (Corporate finance); CC&Soci (Corporate finance).

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• Topics
• Southern Europe
• Exits
• Consumer
• Investitori Associati S.p.A.
• Italy