Bain Capital, MV Credit acquire controlling stake in Pronovias
Roberta HERRERA
Pronovias
Founded by Alberto Palatchi in 1922, the Spanish bridal company was acquired by BC PartnersKKRPermira
“Pronovias is pleased to announce that its main shareholder, BC Partners, together with a large majority of its senior and junior creditors have reached a binding agreement to recapitalize the group,” the bridal fashion company announced in a statement on Tuesday, December 20.
Through this operation, of which financial details have not been disclosed, Pronovias intends to “strengthen its balance sheet” and receive “a significant injection of new funds that will allow the company to fulfill its strategic plan.”
The sale and purchase agreement implies that the majority ownership of the bridal group will be transferred to a “consortium of investors” led by its main creditor, the American firm Bain Capital
This consortium is committed “to the long-term future” of the group.
A transaction to secure the company’s future
According to the company, the remaining debt maturities will be extended to “provide the necessary margin to successfully execute the business plan.”
The group also added that the transfer of ownership will allow it to benefit from “better financial conditions that will improve its liquidity profile and support greater reinvestment in the business.” The company’s priority is to allocate a “significant amount of liquidity” to finance the its future developments.
“The group will now have the strength and financial capacity to accelerate its business plan,” said Amandine Ohayon, CEO of Pronovias, stressing that the company is the “world’s leading bridal fashion brand” and that it has “all the necessary elements to continue to shape the industry as it continues to recover from the pandemic”.
After thanking BC Partners for its financial and operational support over the past five years, Ohayon went on to say that “thanks to the consortium, Pronovias is in a strong position and is fully prepared to successfully develop its future”.
Sandro Patti, CEO of Bain Capital, said: “We have been a major financial backer of Pronovias over the past few years and we know the business well. Thanks to its commitment to cutting-edge fashion, innovative designs and personalised services, the company is well positioned to become the bridal brand of choice for the post-pandemic wedding craze.”
In addition, the executive noted that Bain Capital will provide operational and financial support to the bridal group to “ensure that it achieves its full potential.”
This transaction, subject to regulatory approvals, is expected to close in early 2023.
The difficult task of getting back on your feet after the pandemic
Like so many other companies in the bridal industry, Pronovias has been particularly affected by the impact of Covid-19, which imposed restrictions on its business and shook the wedding industry.
The pronounced seasonality of wedding planning and the unique nature of the garments that characterise a sector highly sensitive to change were compounded by organisational constraints, delays in appointments and many cancellations, resulting in today’s celebratory events becoming saturated in an attempt to make up for lost time. In addition, the pandemic has changed bridal trends and bridal firms are rushing to react to market developments at a fast pace, under the challenge of dealing with inflation and reluctance in the Chinese market, once one of the world’s most important in the bridal industry.
At the beginning of 2021, the Barcelona-based group’s debt stood at 330 million euros. In the past financial year, Pronovias posted losses of 66.6 million euros, while sales were 35% lower than in 2019. According to Moody’s
When contacted by FashionNetwork.com
The group, which owns the brands Pronovias, Nicole, Lady Bird, St Patrick, White One, and has a distribution agreement with American brand Vera Wang
Pronovias expects to “generate strong double-digit sales growth” by the end of 2022 with a 40% year-on-year increase in revenues.
