Kering and EssilorLuxottica become suitors for eyewear maker Marcolin

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Kering and EssilorLuxottica are among the suitors for Marcolin, the Italian maker of Tom Ford's popular eyewear line, according to people familiar with the matter.

The Veneto-based company's private equity owners are seeking a valuation of up to 1.3 billion euros, people familiar with the matter said, and the company has entered into deals with rivals Safilo, Franco-Italian Optical Group and French luxury goods group among others in recent weeks. Preliminary negotiations were held. . U.S.-based Marchon has also expressed interest, according to a person involved in the talks.

However, the €1.3 billion asking price has become a sticking point between the company, in which PAI Partners owns 83%, and its potential acquirers, according to multiple people familiar with the matter.

The Paris-based private equity group first invested in family-owned Marcolin in 2012 and hired Goldman Sachs as an adviser.

PAI, Marcolin, Kering, EssilorLuxottica and Safilo declined to comment. Goldman Sachs and Marshan did not immediately respond to requests for comment.

Marcolin, based in the northeastern town of Longarone in the heart of Italy's eyewear-making region, last year secured a permanent license agreement to produce Tom Ford eyewear for 250 million euros. The Tom Ford trademark is currently owned by New York-based Estée Lauder, whose fashion lines are operated by the Ermenegildo Zegna Group.

The eyewear group has also signed deals with brands including Pucci, Zegna and Max&Co, and most recently signed a licensing deal with luxury shoemaker Christian Louboutin.

Bankers and analysts say lucrative Tom Ford licensing deal is attractive to potential suitors, although it does not justify paying more than 1 billion euros for a group with complex industrial businesses that are difficult to integrate of.

Kering Group, which has a growing eyewear unit, Essilor Luxottica, the world's largest eyewear maker, Safilo and Marchon are all eyeing Marcolin and view the Italian asset as an opportunistic addition, according to several people familiar with the matter.

However, three people familiar with the matter said that neither Kering, Essilor or Safilo were willing to “overspend” in this regard. Acquiring Marcolin may also encounter significant regulatory hurdles, given that they are both large players in the eyewear industry.

People familiar with the matter said EssilorLuxottica would be Marcolin's best choice. Marchon and Safilo are considered the least likely buyers, with Marchon being smaller than the others and Safilo's recent financial results being weak.

Private equity buyers have so far avoided the sale process because they believe Marcolin is too expensive at the price expectations currently set by PAI Partners, according to people familiar with the matter. However, if Makrin fails to reach an agreement with a strategic buyer, they may stage a comeback.

In the first nine months of 2023, Marcolin's revenue increased by 3% to 421.6 million euros. Adjusted core profit increased by 28% to 64.6 million euros. The company will release full-year results later this month.