Valentino’s owner buys Balmain for 485 million euros

Mayhoola, the Qatar’s sovereign fun has just acquired the French fashion house Balmain, The group already own Italian luxury powerhouse Valentino.

“After completing this transaction Mayhoola for Investments will hold 100 percent of Balmain’s capital,” said the merger and acquisitions company Bucephale Finance, reported Reuters.

As published by ‘Les Echos’, the Qatari fund would have reportedly offered 485 million euros for Balmain, which to date was mostly (70 percent) in the hands of the heirs of the former CEO, Alain Hivelin, who died in December 2014. The remaining 30 percent of the company’s capital is held by management.

Market sources have explained that the reported Qatari offer was higher than sale estimates of 300 to 400 million euros. Under the terms of the agreement, Mayhoola agreed to finance Balmain's international expansion as well as the development of an accessories line, add sources close to the matter.

Qatari fund Mayhoola buys Balmain from former CEO’s heirs

The transactions puts an end to months of negotiation between the Qatari sovereign fund –supported by the emir of Qatar – and the fashion label current investors, who include Sanofi co-founder Jean-Francois Dehecq and the family of former chief executive and controlling shareholder Alain Hivelin, who passed away in 2014.

Founded in 1945 by designer Pierre Balmain, his namesake brand has gone through various creative and financial crisis, lately enjoying added momentum following the leadership of Pierre Decarnin, a former stylist at Paco Rabanne, came on board in 2006 and relaunched the brand, catching the attention of several Hollywood stars.

Hivelin revived Balmain, which was near bankruptcy in 2004. It’s noteworthy that Balmain remains one of the very few remaining major independent fashion labels In France, along with Lanvin and Hermès.

Sources quoted by Reuters estimate that Balmain generated around 130 million euros in sales in 2015, with sales growing by 25 percent.

The final price, which is unlikely to be disclosed, will depend on how much cash the existing shareholders will take out of the company, highlights ‘The Guardian’.

Market sources have pointed out that, being the final price tag 460 million euros, the Qataris would be valuing Balmain at around 14 times earnings before interest, tax, depreciation and amortization (Ebitda)

Mayhoola is an investment vehicle supported by Sheikha Mozah, the second wife of the former emir, which already owns Valentino and holds controlling stakes in Italian tailor Pal Zileri and British fashion brand Anya Hindmarch.

Image:Balmain Web – SS16 Womenswear Collection