Marcolin S.p.A.: PAI Partners to acquire a majority stake of the eyewear manufacturer

15 Oct 2012

PAI Partners SAS ("PAI Partners"), a leading European private equity firm, has reached an agreement to purchase a 78.39% stake in Marcolin S.p.A. ("Marcolin" or "the Company"), an Italian eyewear manufacturer, in a proprietary primary LBO transaction in one of its core investment sectors.

The purchase will be carried out by Cristallo S.p.A. (“Cristallo”), a company indirectly controlled by certain investment funds managed by PAI Partners (the “PAI Funds”), which has agreed to purchase a stake of n. 48,713,376 shares representing 78,39% of the share capital of Marcolin at a price of Euros 4.25 per share for an aggregate total price of Euro 207,031,848 (the “Transaction”) from the parties to Marcolin’s shareholders’ agreement (Marcolin family and Della Valle brothers) and Antonio Abete (the “Sellers”).
Pursuant to the Agreement entered into by the parties (the “Agreement”), the completion of the Transaction is subject to the following conditions precedent: approvals by relevant antitrust authorities and actual drawdown of the funds as per the credit facilities already entered into for the Transaction.
As of today, the Transaction is expected to be completed in late November.
Following the completion of the Transaction, Cristallo shall launch a mandatory public tender offer for the remaining share capital of Marcolin, which is publicly traded, at a price of EUR 4.25 per share, pursuant to article 106 of Legislative Decree 58/1998, as amended (the “Mandatory Tender Offer”). Cristallo aims at the delisting of the shares issued by Marcolin.
On completion of the Transaction, some of the Sellers (and, precisely, Giovanni, Cirillo and Maurizio Marcolin, Andrea and Diego Della Valle, and Antonio Abete) (the “Reinvesting Shareholders”) will subscribe an indirect stake, representing in the aggregate 15% of Cristallo, at the same economic terms and conditions as the PAI Funds.
The relevant investment agreement between the PAI Funds and the Reinvesting Shareholders regulate the terms and conditions of the respective investments in order to fund the Transaction, the Mandatory Tender Offer and the following steps to achieve the delisting of Marcolin, and provides inter alia the signing of a shareholders’ agreement at closing of the Transaction. Such agreement (to be published in accordance with art. 122 of of Legislative Decree 58/1998) will contemplate inter alia:
‐ the composition of the Board of Directors and of the Board of Statutory Auditors of Marcolin, Cristallo and the other companies of the acquisition structure so to ensure the appointment of members designated by the Reinvesting Shareholders;
– a three year lock‐up, tag‐along and drag‐along, and pre‐emption rights.
Marcolin is one of the largest and fastest growing eyewear manufacturers in Italy and is a leading global producer of glasses and sunglasses for such brands as Tom Ford, Roberto Cavalli and Just Cavalli, Diesel, Montblanc, Tod’s and Hogan, Balenciaga, Swarovski, Timberland, DSquared2 and Kenneth Cole. The Company was founded by Giovanni Marcolin in 1961 and is headquartered in Longarone, Italy. It has offices across Europe and in the United States, Hong Kong, Japan and Brazil.
The Company had sales of EUR 224.1 million and EBITDA of EUR 34.2 million in 2011, up 9% and 14% respectively from the previous year.
PAI Partners will support Marcolin through its next phase of growth, investing in the expansion of the Company’s international footprint and long‐term contracts with major designer brands.
The consumer sector is one of PAI’s core target areas for investment, having successfully invested with leading consumer brands including: Gruppo Coin, a leading Italian fashion retailer; The Nuance Group, the third largest airport duty free retailer worldwide; United Biscuits the largest biscuits manufacturer in the UK; and Yoplait, one of the top 20 global consumer brands.