Ermenegildo Zegna, the renowned Italian luxury group known for its high-end menswear and textiles, is edging closer to its listing on the New York Stock Exchange (NYSE). Originally slated for November, the market flotation had to be delayed until the end of December due to the immense demand for stock options. The company’s move to go public has garnered interest from various investment funds, investors, and even industry players such as Patrizio Bertelli, the CEO of Prada.

In July, Ermenegildo Zegna announced its plans to list on the stock market later in the year by utilizing a Special Purpose Acquisition Company (SPAC). A SPAC serves as an empty shell company created solely to raise funds on the stock exchange, speeding up a company’s entry into the financial market. Ermenegildo Zegna teamed up with Italian investment fund Investindustrial, led by Andrea Bonomi, to establish a SPAC called Investindustrial Acquisition Corporation (IIAC).

Both Zegna and IIAC revealed in a press release that they have reached an agreement with major investors and undisclosed entities resulting in an additional private investment in publicly traded shares amounting to $125 million. This operation, referred to as Private Investment in Public Equity (PIPE), permits the company to issue shares to interested investment funds at a slightly lower price than the market value, expediting the capital-raising process.

So far, IIAC has amassed a total of $402.5 million since its creation for the Zegna listing. On December 15, an extraordinary Annual General Meeting (AGM) will be held by IIAC to approve the new business combination. Following the AGM, IIAC will be dissolved, and Ermenegildo Zegna will be officially listed on the NYSE under the ticker symbol ZGN.

Once the listing is finalized, Ermenegildo Zegna is expected to have a valuation of $3.2 billion, which includes new financial resources totaling $880 million. The Zegna family will continue to hold a controlling stake of 62%, while Investindustrial will possess 11%, and the remaining 27% will be available as floating stock. The capital raised consists of $403 million from IIAC, $225 million directly provided by Investindustrial, and the remaining $250 million through PIPE.

Founded in 1910 in Trivero, near Biella, in the famed wool production district of Piedmont, Ermenegildo Zegna initially focused on textile manufacturing. However, the company expanded into luxury menswear and has since gained global recognition. In 2018, Zegna acquired a majority stake in the US luxury label Thom Browne, resulting in doubled revenue since the acquisition.

In preparation for the listing, the company has retained its name as Ermenegildo Zegna but underwent a logo redesign. The new logo features two horizontal bands in vicuña beige, separated by a black central band reminiscent of vintage Parisian metro tickets. The main line, designed by Alessandro Sartori, also underwent a name change and is now simply known as Zegna.

As of the end of 2020, Ermenegildo Zegna had a presence in 80 countries through 296 directly operated monobrand stores. The group expects to achieve similar sales levels to those in 2019, with China accounting for a significant portion of revenue. The NYSE listing is poised to provide further opportunities for Zegna to expand globally while also strengthening its organization through acquisitions.

Useful links:
1. Ermenegildo Zegna Official Press Release
2. CNBC Article on Zegna’s Private Investment and US Listing