Private equity firms lean on strategic exits with M&A still tough

Bluegem’s sale of Dr Vranjes Firenze relied on ‘a process tailored to trade buyers who are less affected by the expensive financing’, says founding partner Emilio Di Spiezio Sardo.

Strategic sales offer an exit route amid an “M&A environment that remains extremely challenging”, said Emilio Di Spiezio Sardo, founding partner at Bluegem Capital Partners, which last week announced the sale of luxury home fragrance company Dr Vranjes Firenze to L’Occitane Group.

Bluegem sold Dr Vranjes for €150 million, according to sources close to the matter. The company had delivered 25 percent CAGR since Bluegem’s initial investment in 2017, said Di Spiezio Sardo.

Those numbers came despite an M&A backdrop that has not improved since last year and still suffers from “expensive financing and a lack of risk appetite”, said Di Spiezio Sardo. Alongside Dr Vranjes being a “resilient” business, Bluegem hit the numbers by “running a process tailored to trade buyers who are less affected by the expensive financing and with a higher confidence in the business given their long-term horizon”, said Di Spiezio Sardo.

Bluegem launched a competitive process in mid-2023 with “a number of selected qualified parties” invited to participate, he added, following inbound interest in 2022.

Selling to a corporation like French luxury retailer L’Occitane was in keeping with several other private equity firms’ tactics in the last few weeks, including Bridges Fund Management’s sale of home energy efficiency business AgilityEco to M Group Services and PAI Partners’ proposed exit from in-vitro diagnostic company ELITech Group to Bruker Corporation.

More such deals are likely as strategic buyers “take advantage of improved valuations to purchase quality companies, many of which owned by PE firms looking for exits to provide liquidity for their LPs”, Searchlight Capital Partners founding partner Oliver Haarmann told PE Hub Europe last week as part of our outlook 2024 series. Riverside Europe managing partner Karsten Langer also expected a return of strategic buyers as part of the same series.


Dr Vranjes’ growth numbers under Bluegem’s ownership included a tripling in sales to over €42 million in 2023 and an EBITDA margin exceeding 30 percent. That came despite the highest inflation in decades hitting consumers in the pocket.

London-based Bluegem focuses on the consumer segment so it had a “set of tried and tested criteria” to identify products that appeal to a loyal and affluent customer base that is resilient across macro cycles, said Di Spiezio Sardo.

“Deploying our value creation toolkit, including internationalisation, ecommerce, and new product development, allowed us to expand our reach and significantly enhance growth of the business organically, despite the current environment.”

Dr Vranjes has expanded beyond its Florence HQ to sell in 75 countries, with more than 70 percent of its revenues now coming from international markets, he added. The company also had a jump in digital sales, which now make up over a quarter of total revenue.