Sportswear Company - Stone Island acquired by Moncler

Moncler agreed on 7 December 2020 to acquire the whole of Sportswear Company from Rivetex, the Rivetti family shareholders and Temasek Holdings, at an equity value of €1.1bn for 100% of the capital, representing an EV/EBITDA multiple of 16.9x on the year to October 2020. Completion was expected during the first half of 2021, subject to competition clearance and to approval of a capital increase by the acquirer’s shareholders. Based at Ravarino, Sportswear Company owns and operates the Stone Island brand, a men’s casual wear house founded in 1982 whose positioning rests on textile research: the development of fibres, dyes and finishing treatments applied to the finished garment rather than to the cloth. Revenue reached €150–250M for the year to October 2020, 1% above the previous year, with an EBITDA of €68m. The company employed 308 people, operated 24 stores and derived 78% of sales from wholesale distribution, with 28% of revenue in Italy and 52% across the rest of Europe. The two companies occupied complementary positions in their distribution. The acquirer generated 77% of its revenue through its own stores and 44% of it in Asia, where the target had almost no presence, while the target depended on wholesale accounts concentrated in Europe, which defines what the combination was intended to change. Payment combined cash with equity. The sellers undertook to subscribe 10.7 million newly issued Moncler shares at 37.51 euros, the average price over the preceding three months, for an amount equal to half the consideration, and Temasek retained the option of taking cash alone, in which case the acquirer’s maximum disbursement would reach 748 million euros. Governance required particular treatment, the vendors having agreed to transfer their new Moncler shares to Ruffini Partecipazioni, the holding company through which Remo Ruffini controls 22.5% of the acquirer, which caused the board to treat the acquisition as a related party transaction of major importance under Consob regulation, with a dedicated committee issuing a favourable opinion before approval. Carlo Rivetti joined the acquirer’s board and continued to lead the target with his management team. Citigroup and Cornelli Gabelli advised Moncler, with Gatti Pavesi Bianchi as legal counsel, Ludovici Piccone on tax and KPMG on accounting matters, while Rothschild & Co advised Sportswear Company, with Pedersoli as counsel.