VTB Capital, the investment arm of Russia’s second largest lender, VTB Bank, is on its way to buy a 60pct stake in Italian fashion maison Roberto Cavalli. The deal might be signed by mid-October even if VTB as well as Sberbank, Gazprombank, Vnesheconombank (VEB) and Russian Agriculture Bank (Rosselkhozbank) were all hit by sanctions that bar US and EU nationals and companies from buying or selling new bonds, equity or other financial instruments with a maturity of more than 90 days issued by major state-owned Russian banks or entities acting on their behalf.
Actually VTB Capital is now said to be acting for a Cyprus-base private equity fund (see here an article by Russian financial newspaper Vedomosti). Negotiations between the 73-year-old entrepreneur and VTB Capital kicked off at the beginning of the summer after the Florentine firm, famous for its colourful animal prints, repeatedly failed to sell to a traditional private equity fund because of its hefty price expectations.
Negotiations fell apart first with Permira and then with Investcorp on a 450 million euro evaluation (enterprise value) or more than 20x Cavalli’s 2013 ebitda of 22.4 million euros (see a previous post by BeBeez) when the maison reached revenues of 201 millions (+9% from 2012). VTB is instead evaluating Cavalli 830 million euros or 37x its 2013 ebitda.