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Blackstone cashes in on Versace’s $2.1B sale to Michael Kors

From real estate to retail to financial services, Blackstone’s mammoth portfolio of businesses and buildings reaches into about every industry imaginable. But the New York-based buyout firm ventured beyond its extensive comfort zone in 2014, when it paid €210 million (about $287 million at the time) for a 20% stake in luxury fashion brand Versace, valuing the Italian company at €1 billion.

Four-and-a-half years later, the firm founded by Stephen Schwarzman is poised for a nice return on that investment. On Tuesday, fashion brand Michael Kors agreed to purchase Versace for an enterprise value of €1.83 billion, or $2.12 billion, with Blackstone exiting its entire investment as part of the transaction. That price would seem to value Blackstone’s 20% stake at some $424 million.

Stock in Michael Kors (NYSE: KORS) dropped more than 8% Monday, when reports of a deal first emerged, before inching back up 2% on Tuesday. As part of its takeover, the company announced plans to open roughly 100 new Versace stores, increase the brand’s online offerings and expand its reliance on accessories and footwear, all in an effort to grow Versace’s annual revenue from $850 million to upward of $2 billion. Michael Kors, which will be renamed Capri Holdings upon the closing of the transaction, also hopes to shift a portion of Versace’s portfolio away from North and South America and into Asia.

It’s been a good year for Blackstone when it comes to high-profile exits. In June, the firm agreed to sell 15.8 million shares of hotel chain Hilton Worldwide for some $1.3 billion, per Bloomberg. Overall, it’s believed the firm realized about $14 billion in profit from its initial 2007 investment in Hilton, marking what’s reportedly the most profitable exit in private equity history.

That news came a month after the buyout divisions of Blackstone and Goldman Sachs agreed to sell Ipreo, a provider of financial analytics focused on the stock market, to data firm IHS Markit for $1.86 billion. Ipreo’s valuation nearly doubled from when the two firms bought the company for some $975 million in 2014.

 

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