Permira recaps Hugo Boss

Following the recapitalisation, Permira will have returned nearly half of all invested capital from its €11bn Fund IV.

UK-headquartered Permira will return cash to investors by recapitalising Red & Black, the investment holding company for Hugo Boss, and by fully realising its stake in Marazzi Group. 

Permira told investors last week it would return 47 percent of initial costs of its investment in Hugo Boss. This is on the back of reducing the company’s debt and its sale of Valentino to a Qatari investment group for about €700 million last July. 

Permira declined to comment.

The recapitalisation marks the first time Permira has returned capital from Hugo Boss to investors since its original investment in 2007. Permira has made two small share placements since then, which were used to reduce the company’s debt. The proceeds from the Valentino sale were also used to deleverage the business. 

Permira IV, which holds 56 percent of Hugo Boss, hasn’t reduced its stake in the business as a result of the transaction. It is understood that at the end of September, Permira’s investment in Hugo Boss was valued just over 2x. 
Additionally, Permira has now fully exited Italian tile maker Marazzi Group. In April, the firm sold its stake in Marazzi to American trade buyer Mohawk Industries in a deal valuing the company at €1.2 billion. 

To date, Permira has fully exited five businesses from Permira IV, including NDS, Galaxy Entertainment and Provimi. It is understood that almost half of the cost of all investments in Permira IV have been returned. 

The recapitalisation of Red & Black comes as Permira is still in market raising its fifth fund. In April, Permira V, which is targeting €4 billion to €5 billion, held its first close on €2.2 billion.