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Blackstone in €210m Versace deal

The firm fought off competition from other GPs including Investcorp and CCMP for a slice of the luxury fashion brand.

The Blackstone Group has bought a 20 percent minority stake in Italian luxury fashion brand Versace, according to a statement.

In a deal that values the company at roughly €1 billion, Blackstone acquired €60 million in stock from Versace and will invest €150 million of equity. It is understood no debt was used in the transaction.

The firm bought the stake after taking part in an auction, during which it fought off competition from other GPs including Investcorp and CCMP, according to a source close to the matter.

Blackstone declined to comment beyond the statement.

The capital injection from Blackstone will allow the company to invest in its retail store network in both existing and emerging markets. It will also enable Versace to further develop the company’s portfolio of brands, as well as its product offering and enhance its e-commerce business, the statement said.

Following the acquisition, the Versace family “will remain at the heart of the company”, the statement said. Stephen Schwarzman, chairman, chief executive officer and co-founder of Blackstone, called Donatella Versace “a true icon” and said “we are committed to helping Versace realise its strong growth potential around the world.”

Versace, which will publish its financial results by the end of March, expects revenue growth to be close to €480 million this year. EBITDA is expected to be €69 million this year – up by 50 percent.

It is understood that two-thirds of the equity Blackstone has invested came from Blackstone Capital Partners VI while one-third came from Blackstone’s Tactical Opportunities fund, a vehicle that recently closed between $5 billion and $5.5 billion.

Blackstone Capital Partners VI, which closed on $16.27 billion in 2012, appreciated 20.5 percent during 2013. At the end of Q4, it was being held at a 2.8x multiple and a 37 percent net IRR, the firm said during an earnings call in January.

Several GPs have shown an appetite for deals involving luxury fashion brands in recent years. Last October, Trilantic Capital Partners bought a minority stake in Betty Blue, an Italian luxury fashion brand, for approximately €45 million. In November 2012, Bahrain-listed Investcorp acquired Georg Jensen, a Scandinavian luxury brand, for $140 million, while in July of that year, Permira sold fashion brand Valentino for about €700 million having invested in the business since 2007.