Business combination between IIAC and Zegna
On July 18th 2021, Investindustrial Acquisition Corp. (“IIAC”), a special purpose acquisition corporation sponsored by Investindustrial, entered into a definitive agreement that would make Ermenegildo Zegna S.p.A. (“Zegna” or the “Group”) a public company listed on the New York Stock Exchange later this year. The merged entity will have an anticipated initial Enterprise Value of USD 3.2 billion and expected market cap of USD 2.5 billion.
As part of the transaction, the Zegna’s family will retain control on the combined entity with a stake of approx. 62% while Investindustrial will own 11% (pro-forma stake incorporating the FPA as detailed below, the impact of 50% sponsor promote shares and mgmt. grants, assuming no redemptions from current shareholders. Remaining 50% of sponsor promote shares will be subject to vesting conditions) with a three-year lock-up commitment. Free float will be ca. 27%.
Investindustrial Acquisition Corp. is a blank check company formed for the purpose of effecting a business combination with one or more businesses, has expected cash liquidity of about USD 880m, made by USD 403m in cash, a fully committed USD 250m PIPE (private investments in public equity) and approx. USD 225m in a forward purchase agreement (“FPA”) from Investindustrial. IIAC is sponsored by Investindustrial Acquisition Corp. L.P., a limited partnership whose major investor is Investindustrial, a leading European group of independently managed investment, holding and advisory companies with Euro 11 billion of raised fund capital.
Founded in Italy in 1910, Zegna is a leading global luxury group, internationally recognized for the superior “Made in Italy” quality and design. Managed by Gildo Zegna (CEO), the Group designs, creates and distributes luxury menswear and accessories under the Zegna brand and womenswear, menswear and accessories under the Thom Browne brand in over 500 stores, of which 296 DOS, in 80 countries around the world. Zegna has a strong exposure to the growing leisurewear (>50% in 2021E) and the Chinese/APAC market. Pre-Covid-19 outbreak, Zegna generated a turnover of ~€1.3bn with EBITDA (post IFRS-16) of ~€287m or ~€160m (pre IFRS-16).
In the context of the transaction, Mediobanca advised Investindustrial Acquisition Corp. also issuing a fairness opinion to IIAC board of directors. This also represents Mediobanca first fairness opinion released in the US market.