Ermotti-led SPAC to help Italian Zegna go public in US $ 3.2 billion deal

MILAN, July 19 (Reuters) – Ermenegildo Zegna has agreed to be listed in New York this year by partnering with a specialist American acquisition company (SPAC) in a deal that grants the Italian fashion group luxury goods with an enterprise value of $ 3.2 billion.

It is the latest example of an Italian family-owned fashion company looking for outside investors to strengthen its finances and be more competitive globally, after the industry was hit hard by the coronavirus crisis.

“We could have been independent for another 100 years, but now is the time and the world has changed a lot and luxury has become very difficult,” Managing Director Gildo Zegna told the Financial Times.

Zegna, founded as a textile company in 1910 and today a major player in formal menswear, will raise $ 880 million by partnering with US SPAC launched by European private equity group Investindustrial and chaired by Sergio Ermotti, former CEO of Swiss bank UBS (UBSG .S).

Under the terms of the deal, first announced by the FT and Corriere della Sera, Zegna will sell part of its holdings and keep 62% of the combined company, which is valued at $ 2.5 billion. dollars.

Zegna will merge with Investindustrial Acquisition Corp (IIAC.N) in an agreement that will give the New York-listed entity an 11% stake in the Italian brand.

The pandemic, which has forced retailers to temporarily close their stores and led to a virtual freeze on international travel, has hit smaller luxury brands harder than larger and more diverse luxury groups like LVMH (LVMH.PA) and Kering (PRTP.PA).

This has led some family owners to open their businesses to attract new funds. Etro, another Italian family label, on Sunday struck a deal with the LVMH-backed fund L Catterton to sell a controlling stake. Read more

Additional reporting by Radhika Anilkumar in Bengaluru; Writing by Silvia Aloisi; Editing by David Goodman and Edmund Blair

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