Elliott Advisors mulls bid for Reiss, say reports; Soho Square goes for xDesign

We open today with a deep dive into Innova Capital’s plans in Romania – a country with a preference for physical money – with payment services provider Netopia Group.

Next, we have some fashion news, as Elliott Advisors has reportedly expressed interest in buying British luxury apparel brand Reiss from Warburg Pincus and Next.

We also have Soho Square Capital snapping up a minority stake in digital consultancy company xDesign and Bain Capital buying a 20 percent stake in Intel’s IMS Nanofabrication.

Plastic payments

Let’s start with payment services. I caught up with Krzysztof Kulig, a senior partner at Innova Capital about the firm’s plans for Netopia Group and Romania’s changing attitude towards cashless payments.

Bucharest-headquartered Netopia offers SMS, card and mobile payment products and is responsible for 25 percent of Romania’s online card transactions, according to Innova.

“There is a secular trend that drives transactions up in the financial services industry: low penetration of cards and low number of transactions per card in Romania, which is now changing,” Kulig told me.

During the covid pandemic, between June 2019 and June 2021, payment transactions made with cards increased by 60 percent, according to data from the Romanian central bank BNR, quoted by News.ro.

You can read my full interview with Kulig here.

Innova isn’t the only firm that has spotted potential in card-averse regions. Copper Street Capital invested in payment platform Satispay in 2018 with very similar reasoning. “We thought that was quite interesting, it was proven technology, it was scalable and it could be the platform that cracks the cash conundrum in Italy,” Jerry del Missier, founder and executive chairman, told PE Hub Europe in an interview on the exit from Satispay.

In fashion

Moving on to a potential deal. Private equity firm Elliott Advisors is among the bidders for Reiss, a London-based luxury apparel brand, according to a report by Sky News.

Warburg Pincus acquired a majority stake in Reiss in May 2016 with David Reiss, the founder, retaining a minority stake. In 2021, Warburg sold a 25 percent stake to Next, a British multinational retailer. As part of the sale, Reiss’s websites and online operations, both in the UK and overseas, were contracted to Next through Next’s Total Platform.

At least three parties are said to be involved in the auction, Sky News understands.

We’ve asked the PE firms for comment.

For more luxury fashion reading, check out my interview with Permira partner Francesco Pascalizi and principal Giorgio Dinaro, about the firm’s agreement to acquire Milan-based Gruppo Florence, an Italian integrated manufacturing hub for the luxury sector. You can read that story, which focuses on supply chains and sustainability, here.

Digital consultancy

Moving on from fashion design to xDesign. Soho Square Capital has made a minority growth investment in xDesign, a digital consultancy.

xDesign is headquartered in Edinburgh, Scotland. In the last two months, the company has launched a new cloud computing division and acquired CreateFuture.

Soho Square’s investment will support xDesign to accelerate its expansion plans with several new office openings planned around the UK and internationally, focus on organic growth across its business and enhance its operational structure, according to a release.

“Digital consultancy is an expanding market, and this growth has accelerated in recent years as companies increase their IT spend and transition operations to the cloud,” said Joe Tebbutt, a principal at Soho Square. “xDesign is a business that understands the true power of people to create great digital solutions that generate real positive change for clients and end users.”

Nanofabrication

Let’s finish up with another minority stake. Bain Capital Special Situations has agreed to buy around 20 percent of IMS Nanofabrication, a global technology company for multi-beam mask writers, from Intel Corporation in a transaction valued at around $4.3 billion.

IMS will operate as a standalone subsidiary and continue to be led by Elmar Platzgummer, CEO.

Intel first invested in IMS in 2009 and acquired the business in 2015.

IMS has delivered a “significant” return on investment to Intel while growing its workforce and production capacity by four times and delivering three additional product generations, according to a release.

“As the global leader and innovator of emerging technologies in the semiconductor fabrication and nanotech industries, we believe IMS is well-positioned to capitalise on attractive secular tailwinds as additional chip production capacity comes online and build on its leading competitive position, tech differentiation and cutting-edge product capabilities,” said Marvin Larbi-Yeboa, a partner at Bain Capital.