Brazilian shoemaker Arezzo Industria e Comercio SA announced on Tuesday a deal to acquire local fashion brand Carol Bassi for 180 million reais ($31.81 million), as it aims to amplify its position in the fashion and retail sector.
The company said it has also agreed to make two additional payments of 20 million reais each if Carol Bassi, formally known as Guarana Brasil Difusao de Moda Ltda, achieves certain performance metrics from 2022 to 2025.
Despite some analysts saying the transaction was positive for Arezzo, shares in the Brazilian shoemaker plunged more than 4% on Tuesday amid a broad risk-off session, trading at 65.41 reais in early afternoon.
Arezzo said in a securities filing that Carol Bassi is expected to reach 110 million reais in gross revenue and post earnings before interest, taxes, depreciation and amortization (EBITDA) of 32 million reais in 2022.
It added the deal came in line with its goal to consolidate itself as a “house of brands”.
Analysts at Goldman Sachs said the deal was a “strategic positive” for Arezzo as it fit well into the company’s strategy and allowed it to diversify from the core female footwear business, expanding its market and future growth opportunities.
Source: Reuters.com