It took a full 18 months of negotiations, but finally a deal has been struck and Italian Creation Group (the industrial holding company founded in 2013 by Giovanni Perissinotto and Stefano Core) has reached its goal: they've purchased 100% of FontanaArte (the famous Made in Italy lighting brand founded in 1932 by Luigi Fontana and Gio Ponti) from Nice SPA.
FontanaArte now joins the other design firms in ICG's portfolio, which includes Driade, Valcucine, and last June's addition Tosco Quattro, a high-quality producer of bath furnishings.
The takeover (which is valued at €15 million—details are forthcoming in September once the transaction has been completed) fits neatly into Italian Creation Group's business strategy: their objective consists of forming a large industrial design group by acquiring historical Made in Italy firms that boast a high-quality image, are financially healthy, and that fit their design profile, so that eventually their catalog will cover all areas of home furnishings.
As ICG's managing director Stefano Core explains, this development model (which above all aims to expand into foreign markets) pertains to the industrial group rather than the private equity funds. The new objective is to reach €150 million in sales and an IPO within four years. In 2015 FontanaArte's sales totaled €13.5 million.
“Between this acquisition and the Tosco Quattro deal we have a combined annual turnover of €55 million, and we foresee 2016's total reaching €60 million,” said ICG's managing director Stefano Core.
Nice Group president Lauro Buoro was also satisfied by this agreement, stating, “I have a lot of faith in this new partnership, which will continue the initiative that began in 2010, and for this reason I will continue to significantly invest in the FontanaArte project with ICG”.
ICG's purchase of FontanaArte concludes the first phase of their strategy, that being the creation of a sufficiently-ample portfolio of products to cover all areas of the house, as well as a solid and widespread international distribution network.
“Phase two”, as Stefano Core explains, will be to consolidate the group's brands and their internationalization, with an aggregated export quota of 60% within three years (their current quota is slightly above 50%). “We will continue to synergize and integrate the four businesses in the three distribution areas in which we already have offices: the Americas, through our base in New York; the Italy-Europe-Middle East area, based in Milan; and Asia, which is based in Singapore,”—ICG's managing director stated.
Furthermore, negotiations are underway with local partners to open five group showrooms (“ICG Worldwide”), of which three should be open to the public by 2017: one in Milan, one in London, and one in New York. Even though the current strategy calls for strengthening the acquired brands and their distribution networks rather than acquiring other firms, Stefano Core won't rule out the possibility that ICG may, within a few years, carry out other mergers or acquisitions with “large interior design businesses”, in order to expand their range of products and reinforce the group's presence in the market.
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