A sale would mark the end of more than 40 years on the haute couture
scene for Cavalli, known as "The Leopard King" for his animal prints
colorfully cast in leather, silk and velvet.
And it would demonstrate once again the appeal of Italian
family-owned fashion firms for investors after rival label Versace
sold a 20 percent stake to U.S. private equity firm Blackstone <BX.N>
for 210 million euros in February.
An agreement between Permira and Cavalli could be reached in the
coming weeks after the 73-year-old designer, rarely seen without his
large sunglasses and cigar, dropped his reluctance to ceding a
controlling stake, the sources said.
One of the sources said Cavalli would retain between 20 and 40
percent of the company.
Several lenders are currently pitching to be part of a financing
consortium that would include a pool of up to four Italian and
international banks, the sources said.
![](http://archives.lincolndailynews.com/2014/Apr/18/images/ads/current/hartsburggrain_daily_sda_022614.png)
Societe Generale <SOGN.PA> is already working with Permira on the
transaction, said one of the sources. BNP Paribas <BNPP.PA> and
UniCredit <CRDI.MI> are also expected to be involved on the
financing, given their historic ties with the Florence,
Tuscany-based maison, said the sources, who asked not to be named
because the talks are private.
BNP Paribas declined to comment. UniCredit and Societe Generale were
not immediately available to comment.
MANAGERIAL WEAKNESS
Roberto Cavalli has been courted by buyout funds since 2006, a
sector banker with knowledge of the company said. In 2009 it held
talks with Italian private equity firm Clessidra to sell a minority
stake.
The company's managerial structure has recently been weakened by the
departure of Chief Executive Officer Gianluca Brozzetti and Chief
Operating Officer Carlo Di Biagio in January.
Permira, headquartered on London's Pall Mall close to Buckingham
Palace, has deep pockets after it raised 5 billion euros ($6.9
billion) for a new fund in February.
The buyout firm, whose investments stretch from Fish Fingers in
Britain to insecticides in Japan, has a strong appetite for fashion
brands, having backed Italian haute couture brand Valentino in the
past. It still has a controlling stake in German fashion house Hugo
Boss and earlier this year secured control of British footwear brand
Dr. Martens for 300 million pounds ($500 million).
Bankers familiar with the situation have valued Cavalli at around
450 million euros, based on a multiple of 15 times earnings before
interest, tax, depreciation and amortization (EBITDA) of 25 million
euros for 2013.
![](http://archives.lincolndailynews.com/2014/Apr/18/images/ads/current/business_directory_filler.png)
[to top of second column] |
![](../images/ads/current/demay_inv-lda081412.png)
That would exceed Versace's valuation, which came in at 14.5 times
EBITDA, but fall short of the 31.5 multiple that Qatar's royal
family paid to buy Valentino from Permira in 2012.
A spokesperson for Roberto Cavalli called the talks with Permira
market rumors, while Permira declined to comment.
NO INTERMEDIARIES
Cavalli himself, who is in full charge of managerial duties
following the management shake-up, is leading the talks with Permira,
said the sources. Law firm Bonelli Erede Pappalardo in Milan
provides additional advice, the sources said. Bonelli Erede
Pappalardo declined to comment.
"Talks are exclusively being held among principals," said one of the
sources, referring to private talks between the owner and the buyout
firm without any banking intermediaries.
The same person said a rival bid from French fashion group LVMH <LVMH.PA>
was unlikely at this stage. He said LVMH, maker of Louis Vuitton
leather goods and Bulgari jewellery, had been interested in Versace
but had shown no interest in Cavalli, despite similar houses styles
using extravagant garments and bright colors.
LVMH declined to comment.
Last year, LVMH bought an 80 percent stake in Italian cashmere
clothing company Loro Piana for 2 billion euros ($2.8 billion)
without hiring any financial adviser.
![](http://archives.lincolndailynews.com/2014/Apr/18/christian_village_lda_101813.png)
After any Cavalli stake sale, other family-owned brands are expected
to be targeted more aggressively by deal-hungry financial sponsors.
Possible attractive targets include fashion house Etro, knitwear
brand Missoni, clothing producer Blufin, known for its core brand
Blumarine, and footwear manufacturer Fratelli Rossetti, several
industry sources said.
(Editing by Carmel Crimmins and Will Waterman)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |