Basicnet, Permira takes over 40 per cent of K-Way for 190 million

Permira's consumer team has invested over EUR 15 billion, working with more than 40 companies globally, including some of the world's most iconic brands. Permira funds' most notable investments in the sector include Golden Goose, Reformation, Florence Group, Hugo Boss, Valentino, La Piadineria, Dr. Martens and BestSecret.

"In recent years, we have made significant steps in the expansion of the brand. The partnership with Permira will strengthen the resources and experience needed to accelerate our development plans," emphasise Alessandro and Lorenzo Boglione, executive vice-presidents of BasicNet and managing directors of K-Way, while Francesco Pascalizi, partner and managing director of Permira Italia, observes: "K-Way is a brand we greatly admire, and we are excited about the company's future prospects and the possibility of collaborating with BasicNet and the Boglione family.

Completion of the transaction, subject to the usual regulatory approvals, is expected in thefirst quarter of 2025.

Permira was assisted by Giliberti, Triscornia e Associati (legal), EY (financial), Maisto e Associati (tax) and Bain & Company (business). Basicnet was assisted as exclusive financial advisor by Mediobanca.

The transaction agreements provide for the establishment of one company (TopCo) - directly owned by BasicNet, Permira and certain key managers of K-Way - and two further companies directly (MidCo) and indirectly (BidCo) owned by TopCo. BidCo will hold the entire share capital of K-Way. BidCo and K-Way will be merged after completion of the transaction. It is envisaged that - with effect from the date of completion of the transaction: BasicNet will grant BidCo a "Vendor Loan" in the amount of EUR 65 million with a term of 90 months, refinancable, repayable in a single instalment on maturity and remunerated with the payment, on a quarterly basis, of an interest rate of 7.21 %; in addition, BasicNet, Permira, the key managers, TopCo, MidCo and BidCo will enter into a shareholders' agreement concerning the management and ownership structures in K-Way and in the corporate vehicles that directly and indirectly hold the entire share capital of K-Way.

The Shareholders' Agreement provides for a lock-up commitment of the parties of two years with respect to their respective shareholdings in TopCo, as well as Permira's exit rights, including the right to demand that BasicNet transfer all of its shareholdings in K-Way as part of the eventual sale of Permira's entire shareholding and on the same terms and conditions.

The shareholders' agreement also provides that, should the total amount of voting rights held directly or indirectly by Marco Boglione and his descendants in BasicNet fall below 40 per cent, Permira will have the right to sell its entire shareholding to BasicNet, which will be obliged to purchase it, at fair market value, on a pro rata basis.

In each case of disinvestment of its shareholding (sale to a third party, sale to BasicNet or IPO), Permira will be entitled to receive, without any disbursement, a number of shares such that its investment achieves an agreed minimum internal rate of return (IRR), provided that Basicnet's shareholding in K-Way does not fall below 51 per cent under any circumstances.

In addition, in the event that Permira were to sell its shareholding, a earn-out of EUR 10 million, conditional on Permira achieving a minimum capital multiplier, is envisaged for the benefit of BasicNet.

The corporate transactions that lead to the final structure, as described above, constitute major related party transactions in connection with which BasicNet avails itself of the exemption provided for in its 'Procedure for Related Party Transactions'.

Born in Paris in 1965, K-Way has established itself as a lifestyle brand thanks to the iconic 'Claude' foldable waterproof jacket, featuring a coloured zip and a logo inspired by the French flag. Clothing trader Léon-Claude Duhamel observed people running around in the rain with soggy clothes and uncomfortable umbrellas and had an idea: to create a waterproof object that could be carried at all times, which was neither an umbrella nor a mackintosh. Thus was born a revolutionary jacket: light, comfortable, completely waterproof and foldable into a small pocket to be carried on the hip. Classic, modern, hi-tech, functional and colourful, with the iconic tricolour zip, K-Way® has achieved such popularity that it is now one of the most recognised brands, so much so that it is included as a noun in Italian and French dictionaries.

Known for its distinctive windproof and rainproof jackets, K-Way has developed a diverse loyal customer base. Over the past decade, BasicNet and the Boglione family have developed the K-Way brand, renovating shops, improving the customer experience and perfecting product design and quality.