Luxury Italian fashion house, Prada has acquired Versace from multinational fashion luxury group, Capri Holdings, for an enterprise value of €1.25 bn.

Founded in 1978 in Milan, Versace, an iconic brand, is one of the leading international fashion design houses. “Versace stands as a distinctive asset in the luxury landscape.

The brand displays potential to read contemporaneity and marked sensibility in capturing and anticipating the spirit of today’s and future society,” a statement by Prada says.

Under the terms of the agreement, the Prada Group will acquire 100 per cent of Versace for a total Enterprise Value of €1.25 billion ($1.375 bn) on a debt and cash-free basis.

Prada says the transaction will be funded by €1.5 billion of new debt composed of €1 billion term-loan and €0.5 bn bridge facility.

Prada says Versace has a highly recognisable aesthetic, which will be a complementary addition to its portfolio. It believes Versace has significant “untapped growth potential”, which can be leveraged using multiple value creation levers.

Versace will maintain its creative DNA and cultural authenticity, while benefiting from the strength of the consolidated platform, says Prada. Patrizio Bertelli, Prada Group Chairman and Executive Director, says the company aims to continue Versace’s legacy.

“At the same time, we will provide it with a strong platform, reinforced by years of ongoing investments and rooted in longstanding relationships.”

Notably, Versace was founded 46 years ago by Gianni Versace and further developed under the creative vision of Donatella Versace. John D. Idol, Capri Chairman and CEO, says over the last six years, the company has repositioned the brand to place emphasis on its luxury heritage and craftsmanship.

“Through elevated product, marketing and store enhancements, the brand is now well positioned for sustainable long-term growth.”