July is a month that seems to bring good luck to Italian iconic fashion brand Valentino, at least as for m&a transactions. In fact, Kering, the French luxury giant that owns the Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ginori 1735 brands, as well as Kering Eyewear and Kering Beauté brands, announced yesterday that it will acquire a 30 percent stake in Valentino spa for a cash consideration of 1.7 billion euros. Selling the stake will be Mayhoola Lux sarl, an investment vehicle directly controlled by Mayhoola for Investments, itself an investment holding company headed by Mozah bint Nasser Al Missned, the powerful and elegant wife of the Emir of Qatar, Sheikh Hamad bin Khalifa Al Thani, who had signed the agreement to acquire the maison in 2012, just in July. Mayoola will thus currently remain Valentino’s majority shareholder with 70 percent of the share capital. However, the agreement includes an option for Kering to acquire 100 percent of the share capital by 2028 (see the press release here and the investor presentation here).
Kering will become a significant shareholder with representation on the board of directors, and the transaction is part of a broader strategic partnership between Kering and Mayhoola, which could result in Mayhoola becoming a shareholder in Kering. As part of the broader partnership, Kering and Mayhoola will explore potential joint opportunities in line with their respective development strategies. The transaction is expected to be finalized by the end of 2023, subject to approval by the relevant competition authorities.
Recall that back in 2012 Mayoola had bought the entire Valentino maison by writing a check for 720 million euros. Selling then was Red&Black Lux sarl, the holding company controlled 80 percent by the Permira funds and 20 percent by the Marzotto family (see MF Milano Finanza). The transaction had involved only Valentino spa and the M Missoni license, while the other brand then managed by Valentino Fashion Group (VFG), namely MCS-Marlboro Classics, had been separated from the sale perimeter and remained in the charge of Red&Black, the same holding company that then still controlled also the German brand Hugo Boss, from which Permira totally divested in 2015.
The valuation of €720 million paid by Mayoola corresponded to 33x Valentino spa’s 2011 ebitda (which had been €22.2 million, almost equal to the €22.3 million ebitda of the entire VFG) and 24x the ebitda forecast then for Valentino itself in 2012 (expected at €30 million on 370 million in sales, up from €322 million in 2011). Today Valentino has 211 directly operated stores in more than 25 countries and reported revenues of €1.4 billion and recurring ebitda of €350 million in 2022, after closing 2021 with €1.23 billion in revenues, ebitda of €287 million and a net financial debt of €211.2 million(see Leanus report here, after registering for free),
Founded in Rome in 1960 by Valentino Garavani, Valentino is one of Italy’s most internationally recognized luxury houses. A Maison de Couture with a strong heritage, a high-end luxury positioning rooted in Haute Couture, and a portfolio of iconic creations, Valentino has developed an attractive ready-to-wear, leather goods and accessories offering that appeals to a very loyal clientele and celebrities around the world. The strategic partnership will further support the brand elevation strategy implemented by Valentino ceo Jacopo Venturini under Mayhoola’s ownership, which has transformed the brand into one of the world’s most admired luxury houses.
François-Henri Pinault, chairman and ceo of Kering, a group with more than 47,000 employees and a turnover of 20.4 billion euros at the end of 2022, commented, “I am impressed with the evolution of Valentino under Mayhoola’s ownership and I am very pleased that Mayhoola has chosen Kering as a partner for the development of Valentino, a unique Italian house that is synonymous with beauty and elegance. I am very pleased with this first step in our partnership with Mayhoola for the development of Valentino and the continuation of the strong strategic path of elevation of the brand that Jacopo Venturini will continue to lead.”
Rachid Mohamed Rachid, ceo of Mayhoola and chairman of Valentino (in addition to heading the Swiss investment vehicle Alsara Investment Group and having served as Egypt’s Minister of Trade, Industry and Investment) emphasized, “Valentino is one of the top authorities in Italian luxury and we are very happy to welcome Kering as a strategic partner for the future development of the Maison de Couture. Under our leadership, Valentino has strengthened its foundation as a highly desirable luxury brand, and we will continue to strengthen the brand in the next chapter with Kering. We look forward to collaborating with Kering in Valentino and also in other potential opportunities to explore investments together”.
Recall that Mayoola in Italy also owns the entire capital of the Pal Zileri menswear brand. In fact, Mayoola had taken over 65 percent of the capital of Vicenza-based Forall spa, the company that precisely owns the Pal Zileri brand, from the four founding Italian families Barizza, Bellet, Miola, and Ghiringhelli in 2014, while the Egyptian textile and apparel company Arafa Holdings, retained its 35 percent which had taken over at the end of 2008 (see here a previous article by BeBeez). Mayoola then rose to 100 percent of Forall in 2016.
