Private Equity Deals & Transactions

Permira offloads final stake in Hugo Boss

The firm has sold its remaining stake in the German fashion group for €113 per share

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European buyout firm Permira has sold its final stake in German fashion group Hugo Boss, according to a statement from the firm.

Red & Black, the holding company controlled by Permira IV, has placed 8.4 million shares in Frankfurt-listed Hugo Boss at €113 per share, selling its remaining 12 percent stake in the company. Permira, which owns 60 percent of Red & Black, held a direct stake of 7 percent in Hugo Boss.

The UK-headquartered firm acquired Valentino Fashion Group and its subsidiary Hugo Boss in 2007 for a total of €5.3 billion, including debt and fees. The weighted entry share price for Hugo Boss was €46.50 per share.

Permira sold Valentino to Qatari investment group Mayhoola for Investments in July 2012 for around €700 million, Private Equity International reported at the time. 

Red & Black has been steadily placing Hugo Boss shares over the last few months. Last September the holding company placed 7.9 million shares, another 4.9 million in December, and around 14 million shares last month.

Following this latest placement Hugo Boss will have a free float of 91 percent. The Marzotto family, which sold Valentino Fashion Group to Permira, holds a seven percent stake.

The sale of this final stake brings Permira’s return from its investment in Valentino Fashion Group and Hugo Boss to 2.3x, according to a source familiar with the matter.

Permira declined to comment on returns.

Since Permira invested in Hugo Boss in 2007 the company’s sales have increased by 60 percent to €2.6 billion, with EBITDA more than doubling from €275 million to €591 million, Permira said. The number of Hugo Boss stores has increased from 287 stores on acquisition to more than 1,040 stores in 2014, and the company is now present in more than 130 countries.

It is understood that as at the end of December 2014 the €9.6 billion Permira IV was delivering a return of 1.5x, with more than 10 businesses remaining in the portfolio.

The Hugo Boss share price was down 3.88 percent at €114 per share at 11:44 on Tuesday, giving the company a market capitalisation of €8.23 billion.