Luxury fashion brand Moncler has revealed plans to acquire rival sportswear brand Stone Island in a two-step acquisition deal.
As part of the €1.15bn transaction, Moncler will initially purchase a little over 50% of the outerwear brand from owner and CEO Carlo Rivetti, as well as another 19.9% from other members of his family.
Additionally, the retailer will try to acquire the entire share capital of Stone Island, which includes the remaining 30% held by Singapore’s state investor Temasek.
The deal will reportedly conclude in the first half of 2021.
Following the acquisition, Moncler would remain “cash neutral or cash positive”, Reuters reported citing the company’s chairman and chief executive Remo Ruffini.
Speaking to reporters during a conference call, Ruffini said: “I can see Stone Island growing in essential markets, such as Asia and the Americas, still unexplored by them, which we know well.
“It is precisely in these moments that we need new energy and new inspiration to build our tomorrow.”
This deal values Stone Island 16.6 times 2020 expected EBITDA of €68m.
Rivetti is reportedly investing a portion of the proceeds in exchange of shares in Moncler.
Following the deal, the two brands will remain independent and Rivetti would join Moncler’s Board of Directors.
The company could improve the distribution of Stone Island.
In July, Moncler strengthened its digital strategy and plans to double the share of its online business in the next three years.