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Pai Partners to Acquire Majority of Marcolin

Private equity firm has purchased a 78.4 percent stake in the Italian eyewear maker.

MILAN — Pai Partners said Monday it has agreed to acquire a majority stake in Marcolin SpA for 207 million euros, or $268 million at current exchange. 

The European private equity firm will acquire 78.39 percent of the Italian eyewear manufacturer through Cristallo SpA, a company indirectly controlled by some funds managed by Pai Partners.

The transaction, which is to be finalized in late November, was inked between the private equity company and brothers Diego and Andrea Della Valle, who invested in the eyewear company in 2004 and currently hold a 40.6 percent stake; the Marcolin family, owner of 30.58 of the company, and Italian entrepreneur Antonio Abete with 10 percent.

Pai Partners plans to pay Marcolin 4.25 euros, or $5.19, a share, and then launch a voluntary tender offer on the remaining shares at the same price in order to delist Marcolin. The Della Valle brothers, the Marcolin family and Abete will continue to be investors in Marcolin by taking a total of a 15 percent stake in Cristallo.

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The announcement of the deal hit Marcolin’s shares, which closed down 11.9 percent Monday to 4.21 euros, or $5.45. The drop stemmed from the fact that the offer price has been set below Friday’s closing price of 4.78 euros, or $6.19.

“It’s likely that Pai Partners invested in Marcolin to pursue integration in retail business down the line,” said Stefano Corneliani, senior analyst at Intermonte SMI, who pointed to Italian eyewear retailer Salmoiraghi & Viganò as the next probable prey in the private equity firm’s sights.

“We are [pleased] to invest in Marcolin, which is a leader in its sector with excellent growth prospects and is a classic Pai investment in one of our core areas of expertise and focus,” said Pai partner Raffaele Vitale. “We see excellent potential to develop the business in Europe, the United States and particularly in emerging markets, where demand for these products is rapidly increasing.”

Vitale also highlighted the key roles of Marcolin style & licensing officer Maurizio Marcolin and chief executive officer Giovanni Zoppas in the future development of the eyewear group. Zoppas, who joined Marcolin in December 2011, may have facilitated the negotiations between Pai Partners and Marcolin. He was chief financial officer and then ceo at Italian retailer Coin Group, which Pai Partners bought in March 2005 and then sold in May 2011 to British private equity firm BC Partners.

“Pai Partners has a proven track record of working with businesses such as Marcolin,” said Marcolin chairman Giovanni Marcolin Coffen, who founded the company in 1961 in Langarone, Italy, in the Cadore eyewear district. “I am confident that they will add significant value to the company, supporting our progression as we become increasingly international and continue to build on our strong position in this market.”

Marcolin, which went public on the Milan Stock Exchange in 1999, currently produces and distributes eyewear collections for a number of brands, including Tom Ford, Balenciaga, DSquared2, Roberto Cavalli, and Swarovski, along with its house labels Marcolin and Web Eyewear.

Impacted by the crisis in Europe, Marcolin SpA suffered in the first half, with net profits down 20.5 percent to 12.6 million euros, or $16.4 million at average exchange rates. Due to a 15 percent drop in sales, revenues decreased 2.7 percent to 121.5 million euros, or $157.7 million.

Positive signals came from the company’s debt situation, with net debt down to 3.8 millions euros, or $4.9 million, compared with 5.7 million euros, or $7.4 million, in the same period in 2011.