Italian luxury group Zegna debuts on Wall Street $ 3 billion deal By Reuters

By Elisa Anzolin

MILAN (Reuters) – Shares of Italian luxury group Zegna rose in New York on Monday, where they debuted after completing a merger with a U.S. special purpose purchasing company (SPAC) under a $ 3.1 billion business deal.

At 1430 GMT, the shares of Zigna were sold for $ 11.00, up 7.4% from the starting price of $ 10.24. The company said in a statement that the initial market capitalization of the combined group would be $ 2.4 billion.

The Zegna family will have a 66% stake in the merger with Investindustrial Acquisition Corp., which is led by SPAC and Sergio Ermotti, former CEO of UBS, promoted by the private equity firm Investindustrial.

The deal, announced in July, is the latest example of an Italian family fashion business that attracts foreign investors to finance expansion, boost marketing spending and compete with big players after the industry hit hard with the coronavirus crisis.

In media interviews before the start of the market, Zenga CEO Gildo Zegnak, the third generation of the family to run the company since its inception in 1910, said organic growth was a priority, although he did not rule out making small group purchases. suppliers.

Zegna, founded as a textile company and now a leader in luxury men’s clothing, said the list generated $ 761 million in gross revenue, mostly from Investindustrial and other participants in the deal.

As part of the overall transaction, the luxury group raised $ 169 million from the $ 402.5 million initially raised by SPAC, with 58% of its investors returning the money; Mass rescues have been commonplace in recent weeks for this type of deal.

The foreign investor protection deal helped fill most of the gap, with the value of the last $ 3.2 billion company initially raised was $ 3.1 billion.

In recent weeks, including Grab Holdings and BuzzFeed, which have teamed up with SPAC entities to see the stock market go down, have seen their shares fall, while investors are pulling out below the shares praised on Wall Street’s crazy check offerings this year.

The average rate of return has doubled to 58% in the fourth quarter from a year earlier, according to Dealogic data, as many companies fall short of high investor expectations.