Monday, October 21, 2013

Triliantic acquires a minority stake in Betty Blue

There is glamour which is resilient. And watches toward East. It is the glamour of Elisabetta Franchi a creative-entrepreneur from Bologna which in 1998 founded Betty Blue S.p.A., an italian company operating in the luxury premium fashion, clothing ready-to-wear and accessories market under the brand names Elisabetta Franchi and Betty BlueElisabetta Franchi has now opened up to the private equity fund Trilantic Capital Partner in view of a future listing on the stock exchange, in an agreement for the acquisition of a minority equity shareholding. With headquarter in Quarto Inferiore di Granarolo Emilia, in the province of Bologna,  where  back in 2009, with its business expanding more and more, the company took over the factories of a pharmaceutical company on the outskirt of Bologna, establishing a structure of 6,000 sq. m nested in greenery, Betty Blue employs 150 persons.

On the value of the transaction there is utmost discretion, but to get an idea of the numbers of Betty Blue just think that in 2012 the company had revenues of approximately €105 million with an EBITDA of roughly €26 million and for year 2013, the Bologna-based company expects to close the financial year with results in further growth. Based on the results of the company it is expected
that the transaction was done at an enterprise value between €200 and €250 million.

Triliantic invetsment underlines its strategy of focusing on growth companies with further international expansion opportunities. The expertise and knowledge of the european team of Trilantic will enable it to work with  Betty Blue to embark on the next phase of the company's growth strategy.

The entry of Trilantic is based on a shared development plan, which will allow the company and the brand to significantly accelerate growth in international market, with particular reference to the markets of Southeast Asia. Trilantic will accompany the company in a path of internationalization by providing capital and expertise. The intention is to overturn revenues: if 70 % now comes from Italy, the company intends to achieve in a few years 70% abroad.

The presence of a shareholder  such as Trilantic, allows the company to adopt sound corporate governance rules also functional to a possible future IPO. The fund which doesn't have other investments in fashion, actually owns in Italy only one company, holding 65% of the  online betting company Gamnet SpA, which closed 2012 with a turnover of €643 million. 

Betty Blue is already today one of the best italian companies in the space of "accessible luxury" and the idea behind the operation is to land on the stock market, not necessarily the Italian one, within a few years, when the private equity will be ready to exit the company, explained Giacinto d'Onofrio, Partner at Trilantic Capital Partner. The role of Trilantic will be to help the company in the next five years, in being a larger, better known company and more diversified in the offered products and served countries, i.e. to further develop the company's profile as part of its expansion plans.

Trilantic Capital Partners is the vehicle with which a group of former top executives of Lehman Brothers, among them the Italian Vittorio Pignatti Morano (Founder and European Chairman of Trilantic), at the time acquired the private equity activities of the bank after the financial crash.  Triliantic manages four institutional  private equity funds with total assets worth 4.5 billion Euros. Triliantic is owned by 49% by Reinert investments, the investment vehicle of Johann Rupert, the South African billionaire, shareholder of the Swiss luxury giant Richemont (which owns among other brands like Cartier, Montblanc and Chloé). For its part, the brand Elisabetta Franchi, who has dressed Kate Hudson, Avril Lavigne, Michelle Hunziker and Ilary Blasi, among others, operates in Italy and in foreign markets through a network of 80 one brand stores and distribution in over 1,100 multibrand stores. In geographical terms, the incidence of the Italian market is 65%, while abroad the most important areas are currently Russia, the Middle East and Asia. And it is in the latter where the financial backing foresees the biggest growth of the company.

Betty Blue has been advised by Sin&ergetica and law firm ChiomentiTrilantic Capital Partners was advised by the law firm Hogan Lovells for the legal aspects and Bain & Co., PwC, and by the Italian team of Lincoln International for the financial aspects of the operation.