Clessidra buys control of Italian fashion label Cavalli

Italian private equity fund Clessidra acquired control of fashion house Roberto Cavalli on Thursday for an undisclosed sum, concluding one of the longest running courtships in the luxury goods sectors.

Clessidra, which has invested in jeweler Buccellati, held discussions with Cavalli back in 2008 and 2009 and since then, talks had been on and off with other private equity firms including Permira, Investcorp and Russia's VTB Capital.

Sticking points included valuation but also getting licensees to back a deal, sources close to the matter said.

Clessidra is buying a majority stake in Cavalli and together with minority co-investors private equity firm L-GAM and Chow Tai Fook Enterprises Ltd, a Hong-Kong based holding company controlled by the Cheng family, it will own 90 percent.

Roberto Cavalli, the 74 year-old founder of the brand known for its bold animal print designs, retains 10 percent.

Two sources said the deal valued Cavalli at around 390 million euros ($435.90 million), or 16 times core earnings, but the final price tag was not set since there was an earnout clause.

Another source said the price paid was well below the 18 times underlying earnings of 25 million euros ($27.94 million)Permira was reported last year to have offered for the brand.

In 2014, Cavalli's earnings before interest, tax, depreciation and amortization (EBITDA) fell to 15 million euros from 22.4 million in 2013, hit by one-off items linked to problems at licensees. Sales last year rose 4.2 percent to 209.4 million euros.

"In five years from now, we aim to be in a different league," said Francesco Trapani, former boss of Bulgari and head of watches and jewelry at LVMH, who will become Cavalli's chairman.

The Tuscan label founded in Florence in the 1970s today runs around 200 stores.

Peter Dundas, who came from Emilio Pucci, was appointed creative designer in March.

Renato Seminari will be chief executive. Seminari was president at US perfume group Coty and previously was head of LVMH's Guerlain perfume brand and European head of the luxury group's Sephora perfume chain.

Sources close to the deal said Trapani had been very keen to do this deal since joining Clessidra last year and leaving LVMH in January.

Law firm Bonelli Erede Pappalardo and financial advisors BNL BNP Paribas assisted Roberto Cavalli SpA while Credit Suisse Italy’s UHNWI team supported the family. Banca IMI and Gattai, Minoli, Agostinelli & Partners respectively were the financial and legal advisors to Clessidra SGR.

€1 = $1.12/£0.73