September 12, 2018 / 5:32 PM / 11 days ago

Carlyle, Investindustrial eying M&A for new design group

MILAN (Reuters) - Private equity firms Carlyle Group and Investindustrial are teaming up to create a high-end interior design group which is already looking for acquisitions to boost growth.The new venture, called Design Holding, will initially consist of furniture maker B&B Italia together with Flos and Louis Poulsen lighting and will have combined sales of more than 500 million euros ($581 million).

A general view of the lobby outside of the Carlyle Group offices in Washington, U.S. May 3, 2012. REUTERS/Jonathan Ernst/File Photo

The group, which is expected to be up and running by the end of this year, already has a list of possible targets for future acquisitions to be funded with the support of its top investors.

“With strong financial backing from Carlyle and Investindustrial, the group will pursue further acquisitions in adjacent niches,” the Italian and U.S.-based firms said on Wednesday in a joint statement.

The new group aims to expand in the United States and in Asia in particular, one source with knowledge of the deal told Reuters.

The idea is to create a common umbrella for design products to allow the single brands to develop independently but under the same leadership, the source said, citing as an example French luxury group LVMH.

The source added the two main investors could consider an initial public offering for Design Holding in the medium term as a way to exit their investment.

The three companies involved in the operation, which are currently owned by Investindustrial, can boast iconic products including B&B Italia’s armchair “Up” designed by artist Gaetano Pesce and PH artichoke lamp produced by Denmark’s Louis Poulsen.

All three companies will be transferred to the new group in which investment groups controlled by Carlyle and Investindustrial will own equal stakes.

JPMorgan and Lazard were financial advisors in the deal, with legal firms Latham Watkins and Chiomenti advising Carlyle Group and Investindustrial respectively.

Piero Gandini, the founder of Flos, and the Busnelli family, which created B&B Italia, will both have minority stakes in the new venture.

Gandini, current Flos CEO, will become the new group’s chairman, and Giorgio Busnelli, B&B Italia chairman, will be appointed vice chairman.

($1 = 0.8608 euros)

Reporting by Francesca Landini and Elisa Anzolin; editing by David Evans

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