Italy Fashion Brand Valentino Bought By Qatar Royalty For 700 Million Euros

Beijing time July 12th evening news, according to foreign reports, Italy's top fashion brands

(Valentino) has been bought by the Qatar royal family for 700 million euros ($857 million). This is the latest case of European luxury brands being bought by emerging market investors.

Jacqueline Kennedy and Audrey Hepburn were both the fans of the brand.

It is reported that Mayhoola for Investments S.P.C, an investment vehicle backed by a major private investment group in Qatar, has acquired Valentino from the Permira and minority shareholders of the UK private equity fund.

Valentino did not disclose the financial details of the paction and the buyer's name.

However, according to two people familiar with the matter,

The purchase of Valentino for 700 million euros is 31.5 times the company's profit before the 2011 year interest rate depreciation and amortization (EBITDA).

This valuation is far higher than the LVMH's acquisition of Bvlgari (micro-blog) at 28.2 times the price of EBITDA last year compared with the current European market.

10-11 times the expected value of EBITDA in 2012, it is a huge premium.

Analysts say the Qatari royal family, which owns London's Harrods, hopes to build a local luxury brand through the acquisition.

Rachel Zeimba, senior analyst at Roubini Global Economics, said: "this matter is very compatible with Qatar: logo, quality brand, with long-term value and a broad consumer base." Roubini said.

Founded in 1960 by Valentino Garavani (Valentino Garavani), Valentino has gained a worldwide reputation for its prestige bright red chiffon dress, which is widely loved by Princess princesses and Hollywood stars.

However, this old fashion company has been seriously affected by the recent financial crisis. It had to restructure its debt in December 2009, and at the same time struggled to compete with D&G and other new brands.

Recently, however, interest in high-end luxury goods has not been affected by the economic downturn.

In 2011, Valentino's EBITDA grew by 300% over the same period last year, and it is expected to grow more in 2012.

Valentino is the latest luxury brand in Italy bought by foreign investors. It shows that although Italy's economy is in deep recession, high-end brands still show strong resilience.

In December 2010, 0891.HK, China's high-end men's clothing brand, bought Italy's clothing brand Cerruti for 70 million US dollars. In 2011, Dubai retail Cerruti group (Paris Group) bought Gianfranco Ferre, which is on the verge of bankruptcy.

Analysts expect that luxury goods will attract plenty of investors in the depressed economic environment, especially when there are few choices that can attract them.

A luxury analyst in Paris said: "we will see more individual investors focus on luxury brands in Europe.

IPO market is not easy, and emerging market investors from China and the Middle East are the main players.

The assets of the Qatar royal family are very extensive, ranging from the German sports car brand Porsche to the British bank Barclays shares.

Analysts said that Sheikha Mozah, the only princess wearing the high-end custom clothes, was the pioneer of the acquisition. Mozar is famous for Valentino clothing.

Mozar owns Qatar Luxury Group, which owns Le Tanneur & Cie, a French leather product manufacturer.

Through this acquisition, the Qatar royal family will also get the control of the leisure apparel brand M Missoni, while the other sports brand Marlboro Classic will still be owned by Red & Black, Red & Black is an investment tool of Permira, holding the majority rights of the famous German brand Hugo Boss.

In this paction, Perella Weinberg Partners is a consultant to the Qatar royal family, while Valentino employs Yu Xin bank and Mediobanca to provide advisory services.

In 2007, Permira gained control of Valentino Fashion Group, which is at the peak of the market, with 5 billion 300 million euros, which included Valentino and Hugo Boss brand, which became one of the biggest pactions in Europe in that year. The Valentino group was the largest in Europe.