Permira acquires majority stake in Gruppo Florence

August 2023 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2023 Issue

Funds advised by private equity firm Permira have agreed to acquire Italian luxury supply hub Gruppo Florence.

While financial details have not been disclosed, the deal is believed to have been in excess of $1.1bn. The transaction, which is subject to customary regulatory approvals, is expected to close in the fourth quarter of 2023.

The deal will see Permira acquire a majority stake in Gruppo Florence from the company’s existing shareholders, VAM Investments, Fondo Italiano d’Investimento, Italmobiliare and Gruppo Florence’s entrepreneurs.
According to a statement announcing the deal, the entrepreneurs, the management team and VAM Investments will reinvest a significant portion of their proceeds and will remain committed to the project. Fondo Italiano d’Investimento will also retain a minority stake. Attila Kiss will continue to lead Gruppo Florence as chief executive and Francesco Trapani will retain his role as chairman.

“Our industrial project involves significant investments in training, innovative digital tools, research on sustainable production processes, and qualified management for the design and implementation of these programs,” said Mr Kiss. “To achieve our ambitions, it is necessary to bring together a significant number of companies, in particular leveraging their heritage and expertise.”

“We are thrilled to partner with Attila, Francesco Trapani, Gruppo Florence’s team of entrepreneurs, managers and other investors and we look forward to leveraging our experience to support the company in driving its next phase of development,” said Francesco Pascalizi, a partner at Permira. “We are true believers in the Gruppo Florence industrial vision and in the role of ‘Made in Italy’ within the luxury supply chain.”

“The high interest we received from many entrepreneurs who spontaneously sought to join Gruppo Florence clearly demonstrates that the intuition of enhancing the consolidation of the Made in Italy luxury supply chain was a winning decision,” said Mr Trapani, chairman of Gruppo Florence and VAM Investments. “We are ready now to partner with Permira for the second phase of Gruppo Florence’s growth.”

“Supporting the management team in this unique journey and helping to create the largest platform in the luxury supply chain has been a privilege and an exciting challenge,” said Marco Piana, chief executive of VAM Investments. “Now, we look forward to continuing this path alongside Permira, as we are confident Gruppo Florence will prove key in preserving and strengthening Italy’s unique heritage in craftsmanship serving international brands.”

Established in 2020, Gruppo Florence has become the leading Italian manufacturing hub, offering services ranging from product development to the production of high-end clothing and accessories, shoes and leather goods for luxury brands. The group has quickly grown to own 26 companies from informal outerwear manufacturers to footwear specialists, among others. The group generated revenues of more than €600m in 2022.

Fondo Italiano d’Investimento, a fund controlled by state investor CDP Equity, will also retain a minority holding in Florence, while investment holding Italmobiliare will liquidate its stake with a €78m gain.

“With Gruppo Florence we have transformed an entire supply chain made by hundreds of extraordinary craftsmen with the creation of a professional platform serving most of the famous international luxury brands and supporting them implementing their ESG strategies,” said Marzia Bartolomei Corsi, senior partner at Fondo Italiano d’Investimento. “We believe Permira is the right partner to trigger the next phase of our ambitious project and we’ll ensure our support by reinvesting in the deal.”

“Florence is an outstanding project,” said Carlo Pesenti, chief executive of Italmobiliare. “We very proudly contributed to its launch and development, creating in just few years a leading player in textile manufacturing with exceptional development opportunities that the new shareholder will undoubtedly be able to grasp.”

Richard Summerfield