Italian luxury company Zegna will go public in New York today after completing a merger with a US special purpose acquisition company (SPAC) in a deal with an expected enterprise value of $3.1bn.
“Today marks a monumental milestone for Zegna and is the beginning of an exciting and pivotal new chapter in our 111-year legacy,” said Ermenegildo “Gildo” Zegna, CEO of Zegna Group.
In a statement announcing the completion of the SPAC deal, Zegna said the initial market capitalisation of the combined company will be $2.4bn.
European private equity group Investindustrial launched the SPAC for the deal, which is chaired by former UBS chief executive Sergio Ermotti.
In a listing that delivered gross proceeds of $761m, which the group said it would invest in its Zegna and Thom Browne brands, as well as opening up the option for potential small acquisitions of its suppliers.
These proceeds were raised mostly from the buyout group and other participants of the deal, but as part of the overall transaction, the luxury group raised just $169m out of the $402.5m initially accrued by the SPAC.
This total dropped after 58 per cent of its investors took their money back in a mass redemption – a trend that has begun to emerge in the last few weeks as market uncertainty weighs on investors’ perceptions of SPAC deals.
Both Grab Holdings and BuzzFeed have seen their shares tumble after their much-anticipated blank cheque deals.
Zegna managed to make up most of the difference with a backstop deal with outside investors, bringing the final enterprise value to $3.1bn – just under the initial target of $3.2bn.
The Zegna family will own a 66 per cent stake in the combined company.
“At the end of November 2021, the group’s worldwide performance year-to-date is substantially in line with pre-COVID-19 levels,” Gildo Zegna added.
“Today’s announcement unlocks the doors to a brighter future – while we continue to follow our own path.”