(In ninth paragraph changes to "the global economy")
MILAN/PARIS, March 7 PPR is close to
snapping up Milanese jeweller Pomellato in a deal that would
allow the French luxury and sports brand group to expand in a
sector in which it has a small presence, sources close to the
Sources close the deal said PPR, which owns jeweller
Boucheron, emerged as a front-runner after offers from rival
suitors including shareholder Damiani were rebuffed.
"It is very very close. The Damiani family submitted an
offer with a private equity fund, but PPR won," a source with
first-hand knowledge of the transaction said on Thursday.
Separately, a banking source said PPR was near closing the
acquisition which would value the jeweller at around 350 million
euros ($455 million) or 15 times the company's earnings before
interest, tax and depreciation (EBITDA), roughly line with where
others in the European sector are trading.
The transaction, if completed, would mark the second time a
major Italian jeweller has fallen into the hands of a French
group after LVMH acquired Bulgari two years ago for
3.7 billion euros.
Pomellato, whose colourful wares are promoted by actress
Tilda Swinton, declined comment on talks with PPR, saying only:
"The company is considering strategic options for its future."
Pomellato had said in the past it wished to remain
independent and aimed to float its shares on the stock market in
Pomellato, known for its DoDo animal-shaped pendants, helps
PPR fulfil its ambition of strengthening its position in the
jewellery sector via the acquisition of small to medium-sized
businesses with strong growth potential.
Well-established luxury jewellery brands have been enjoying
solid growth rates in recent years in spite of concerns about
the global economy.
The Italian jewellery sector is made up of thousands of
small and family-owned companies, but few have the size of
Pomellato which generated earnings before interest, depreciation
and amortisation of 20 million euros on sales of 138 million in
Last year, PPR acquired a majority stake in Chinese jeweller
Queelin and said more deals could follow in the region.
Financial details of the transaction were not disclosed but
analysts pegged Qeelin's enterprise value at around 70 million
In 2011, PPR acquired Italian suitmaker Brioni, whose
enterprise value was estimated by analysts at between 250
million euros and 300 million, including 100 million of debt.
The Damiani family had bought 18 percent of Pomellato in
Founded in 1967 by Pino Rabolini, Pomellato gained
popularity with the launch of its DoDo brand in 1995.
Rabolini and Chief Executive Andrea Morante control 79
percent of the company through the holding Ra.Mo, with minority
shareholders owning the remaining 21 percent.
The company sells 58 percent of its products in Italy, has
56 directly-operated stores worldwide and is keen to expand in
the United States, Britain, China and Japan.
PPR, known to have been in talks with Pomellato for more
than a year, declined comment.
Media reports have named other suitors such as Prada
, jeweller Swarovski and fashion holding group Only the
Brave, which owns Diesel.
(Reporting by Massimo Gaia, Antonella Ciancio, Astrid Wendlandt
and Pascale Denis; Writing by Astrid Wendlandt; Editing by
Christian Plumb and David Holmes)