United States securities and exchange commission logo
September 23, 2021
Gianluca Tagliabue
Chief Financial Officer
Ermenegildo Zegna Holditalia S.p.A.
Viale Roma 99/100
13835 Valdilana loc. Trivero
Italy
Re: Ermenegildo Zegna
Holditalia S.p.A.
Registration
Statement on Form F-4
Filed August 27,
2021
File No. 333-259139
Dear Mr. Tagliabue:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form F-4
LETTER TO SHAREHOLDERS OF INVESTINDUSTRIAL ACQUISITION CORP., page i
1. The first page of the
letter to shareholders of IIAC notes that IIAC shareholders will be
asked to consider and
vote upon, among other proposals, a proposal to authorize and
approve the Merger and
the Plan of Merger in the form tabled at the General Meeting,
"which will be
substantially in the form attached to the accompanying proxy
statement/prospectus as
Annex B." Please advise why the reference to "substantially in
the form" and what
material differences may exist, if any.
2. The fourth page of the
letter to shareholders contains the statement that "[t]he Business
Combination Agreement
provides that Zegna s obligation to consummate the Business
Gianluca Tagliabue
FirstName LastNameGianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
Comapany 23,
September NameErmenegildo
2021 Zegna Holditalia S.p.A.
September
Page 2 23, 2021 Page 2
FirstName LastName
Combination is conditioned on the amount of cash in the Trust Account
(net of the Cash
Redemption Amount) together with the proceeds from the Forward
Purchase Agreement
and the PIPE Financing being equal to or greater than the sum of (i)
184,500,000 plus (ii)
$400,000,000." Please supplement the disclosure to provide the total
amount in both US
dollars and Euros, assuming a stated conversion rate as of a recent
practicable date.
3. Refer to the last paragraph of the fourth page of the letter to
shareholders which indicates
that the IIAC Sponsor and its Affiliates will hold approximately 11.0%
of the total number
of Ordinary Shares outstanding after the Business Combination based on
certain
assumptions described earlier in the paragraph. Please supplement this
disclosure to
illustrate what such parties will hold under a range of different
assumptions.
Q: Why am I receiving this proxy statement/prospectus?, page 14
4. Revise the third bullet point to include the US dollar amount of the
aggregate purchase
price that is currently referenced in Euros.
Q: Why is IIAC proposing a Business Combination?, page 17
5. Please supplement the disclosure to explain the meaning of the phrase
"which could
leverage off a public currency to drive accretive acquisitions..."
Summary, page 31
6. We note you present adjusted EBIT, a non-IFRS financial measures here
and throughout
the filing. Please provide cross-references to the related
reconciliations of these measures
to the most directly comparable IFRS measure, net income (loss).
Summary Historical Financial Data of IIAC, page 48
7. We note the summary table presents a net loss and a net loss per share
of Class B ordinary
shares for the six months ended June 30, 2021; however, the statement
of operations on
page F-3 presents net income and net income per share of Class B
ordinary shares for the
same period. Please correct the discrepancies in the financial
information presented.
Summary Unaudited Pro Forma Condensed Combined Financial Information, page 50
8. Please present summary pro forma financial information as referenced
in this section.
Background of the Business Combination, page 100
9. Disclosure on page 105 indicates that Mediobanca served as a financial
advisor to the
IIAC Board and provided a fairness opinion. Disclosure on page 104
indicates that IIAC
also hired Goldman Sachs Bank Europe, SE - Succursale Italiana as a
fairness advisor.
Page 105 provides similar disclosure regarding J.P. Morgan. Please
expand to explain
what role these additional advisors served and how such roles were
different from that of
Mediobanca. Please advise what consideration was given to disclosing
the compensation
Gianluca Tagliabue
FirstName LastNameGianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
Comapany 23,
September NameErmenegildo
2021 Zegna Holditalia S.p.A.
September
Page 3 23, 2021 Page 3
FirstName LastName
these two additional advisors received for their advisory services.
10. Disclosure in the fourth to last paragraph on page 104 appears to
indicate that IIAC
engaged Goldman Sachs and J.P. Morgan, among other parties, as
placement agents for
the PIPE Financing. With a view towards risk factor disclosure, please
advise what
conflicts of interest may exist or arise as a result of Goldman Sachs'
and J.P. Morgan's
roles as both placement agents on the PIPE Financing and advisors on
the proposed
Business Combination with Zegna. Specifically, please address via
disclosure how IIAC's
board was able to conclude that these parties are able to provide
objective advice
regarding the merits of the Business Combination if the fees they, or
in the case of
Goldman Sachs', its affiliate, will receive from the Private Placement
are dependent on
consummation of the Business Combination.
Certain Unaudited Zegna Prospective Financial Information, page 116
11. Refer to the last paragraph on page 116 and the carry over paragraph
on the top of page
117. Please revise the assumptions described in this paragraph to
provide greater detail
and quantify where possible. Sufficient quantifiable information
should be disclosed to
enable investors to properly evaluate and assess the merits and
quality of the Projections
and consequently the merits and quality of the various financial
analyses conducted by
Mediabanca which necessarily rely on such projections, e.g. the
discounted cash flow
analysis. We may have further comments based on the adequacy of the
revised
disclosure.
Opinion of IIAC's Financial Advisor, page 119
12. Refer to the disclosure in the second to last paragraph on page 122
indicating that
Mediobanca's opinion "was addressed exclusively to the IIAC Board and
therefore does
not confer any rights or remedies upon any other person, and is not
intended to be used,
and may not be used, by any other person or for any other purpose,
without Mediobanca s
express consent." Please also refer to similar language contained in
Mediobanca's opinion
contained in Annex G. Please disclose in the proxy statement, if true,
that
Mediobanca has consented to use of its materials in the filing.
Other Matters, page 126
13. Disclosure in the first paragraph of this section indicates that
"pursuant to its engagement
by IIAC, Mediobanca is entitled to a fee in line with market practice
for this kind of
service. Half of the fee shall be paid upon the earlier of the
completion of the Transactions
or December 31, 2021, and the remaining portion shall be paid at the
completion of the
Transactions." Please revise to quantify this fee. Refer to Item 4(b)
of Form F-4 and Item
1015(b)(4) of Regulation M-A. While we note the disclosure in the last
sentence on page
127, the referenced Euro 1.6 million appears to include such fee but
does not specifically
disclose such fee. In responding to this question, please also advise
if the reference to
"market practice" in the first sentence of this comment is referring
to market practice for
Gianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
September 23, 2021
Page 4
financial advisors from Italy or market practice for financial
advisors working on
transactions of similar dollar size.
Unaudited Pro Forma Condensed Combined Financial Information
Description of the Business Combination, page 177
14. We note Zegna s historical financial statements do not reflect
certain transactions that will
occur in conjunction with the proposed merger with IIAC. In order for
the public
shareholders of IIAC to better understand and evaluate the acquisition
that they are voting
on, it appears to us you should revise the pro forma balance sheet and
the pro forma
statement of operations to more clearly present the financial position
and results of
operations of Zegna that the public shareholders of IIAC will own. In
this regard, it
appears to us you should revise the pro forma financial statements to
present historical
amounts for Zegna, a column that reflects the transactions not yet
reflected in Zegna s
historical financial statements, including the Dispositions (notes
3(A) and 3(AA)) and the
capital distribution (note 3(K)), and a subtotal column for Zegna to
reflect those
transactions before presenting the historical amounts for IIAC and the
related pro forma
adjustments and totals.
15. Based on the material impact the capital distribution will have on the
liquidity of the post-
merger entity, please more fully address the following here and in the
forepart of the
registration statement:
Explain the reason why Zegna will acquire shares from
Monterubello, including how
the amount of the cash consideration was determined;
Disclose Monterubello s ownership interests before and after the
capital distribution;
and
Address the potential risks and consequences of using a majority
of the proceeds
from the IIAC public shareholders, the proceeds from the IIAC
Sponsor, and the
proceeds from the PIPE investors to essentially fund a dividend
to the controlling
shareholder of Zegna rather than fund the post-merger entity.
Basis of Presentation, page 179
16. Please revise the table that summarizes the number of Ordinary Shares
outstanding under
the two redemption scenarios, presented on page 181 and throughout the
filing, to clarify
the following, if accurate:
Revise note (1) to clarify the number of shares related to the Zegna
Shareholders is
subsequent to the capital distribution in which Zegna will acquire
54,600,000
ordinary shares from Monterubello for cash; and
FirstName
LastNameGianluca Tagliabue
Revise note (2) to clarify the number of shares related to the IIAC
Sponsor excludes
Comapany 5,031,250
NameErmenegildo
ordinary Zegna
shares Holditalia
that will beS.p.A.
held in escrow and are
subject to release if
certain
September 23, 2021targets
Page are
4 attained.
FirstName LastName
Gianluca Tagliabue
FirstName LastNameGianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
Comapany 23,
September NameErmenegildo
2021 Zegna Holditalia S.p.A.
September
Page 5 23, 2021 Page 5
FirstName LastName
Notes to Unaudited Pro Forma Condensed Combined Financial Information
1. Basis of Presentation, page 186
17. We note your disclosure that you have not reflected the income tax
effects of the pro
forma adjustments based on the statutory rate in effect for the
historical periods presented.
Please revise your disclosure to more fully address your determination
that this
information is not meaningful in relation to the significant losses
incurred during
historical periods presented. In this regard, we note that although
Zegna incurred a loss
during the most recent year presented, they also recorded material
income tax expenses.
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
Adjustment (A), page 189
18. Please revise your footnote to:
Clarify the manner in which E.Z Real Estate S.r.l. and the equity
interest in Elah
Dufour S.p.A. are being disposed of; and
Specifically identify and quantify the adjustments that reflect
the future contractual
arrangements between Zegna and E.Z. Real Estate S.r.l., including,
but not limited to,
how your pro forma adjustments address right of use assets, lease
liabilities, and
amortization of right of use assets due to Zegna continuing to
lease from E.Z. Real
Estate S.r.l.. This comment is also applicable to adjustment (AA).
Adjustment (M), page 191
19. Please disclose the specific terms and conditions associated with the
Escrowed Shares
and quantify the key assumptions you used to determine their estimated
fair value.
Please also more fully explain the accounting for the shares,
including, if applicable, the
potential impact that changes in the per share market price of the
post merger entity
could have on the estimated fair value of the shares and on the pro
forma financial
statements.
Adjustment (O), page 192
20. Please provide a reconciliation of the net assets of IIAC at the
balance sheet date under
both redemption scenarios disclosed here relative to IIAC's historical
balance sheet. We
note the amounts disclosed in note (O) appear to include the
additional shares to be
purchased by the Sponsor.
21. Please revise your disclosures to more clearly explain the primary
reason for the material
listing expense. In this regard, it appears that the material listing
expense is essentially due
to the fact that the fair value of the common shares being issued to
the IIAC Sponsors is
substantial greater than the amount the IIAC Sponsors paid to acquire
their shares of
IIAC.
Gianluca Tagliabue
FirstName LastNameGianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
Comapany 23,
September NameErmenegildo
2021 Zegna Holditalia S.p.A.
September
Page 6 23, 2021 Page 6
FirstName LastName
4. Net Loss per Share , page 193
22. Please revise the footnotes to the table to quantify any outstanding
options, warrants and
Earnout Shares that have been excluded from the calculations of pro
forma diluted loss
per share amounts because they are anti-dilutive.
Adjustment (EE), page 193
23. Please cross-reference your disclosure to adjustment (M).
Zegna's Management's Discussion and Analysis of Financial Condition and Results
of
Operations
Results of Operations, page 228
24. When fluctuations in line items are due to more than one reason,
please revise your
disclosures, as applicable, to quantify each material factor that you
identify as contributing
to the change from period-to-period. This comment is also applicable
to your disclosures
related to Results by Segment on page 241.
Income Taxes, page 239
25. Please expand your disclosure to more fully explain the reason why you
present your
effective tax rate net of the Italian Regional Income Tax.
Net Financial Indebtedness, page 246
26. To the extent net financial indebtedness is a defined component of
your debt covenants, as
noted on page 248, please tell us your consideration for disclosing
the actual ratio and the
required ratio specified in the debt covenants.
Investindustrial Acquisition Corporation Audited Financial Statements
Statement of Cash Flows, page F-26
27. Please revise the supplemental disclosure of noncash investing and
financing activities to
include the initial fair value of the warrant liability.
Note 2. Restatement of Previously Issued Financial Statements, page F-31
28. It appears that the first sentence after the table on page F-32 is not
complete. Please revise
your disclosure as appropriate.
Ermenegildo Zegna Holditalia S.p.A Audited Consolidated Financial Statements
General, page F-43
29. Please provide updated interim financial statements and related
disclosures to the extent
required by Item 8.A.5 of Form 20-F.
Gianluca Tagliabue
FirstName LastNameGianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
Comapany 23,
September NameErmenegildo
2021 Zegna Holditalia S.p.A.
September
Page 7 23, 2021 Page 7
FirstName LastName
7. Revenues, page F-80
30. Please tell us what consideration you have given to disaggregated
revenue disclosures by
product line and by sales channel. Refer to IFRS 15.114-115. It also
appears to us you
should revise your disclosures in MD&A related to Revenues to disclose
and discuss the
factors that impacted changes in revenues based on product line and
sales channel during
each period presented.
General
31. Please quantify the aggregate dollar amount and describe the nature of
what the sponsor
and its affiliates have at risk that depends on completion of a
business combination.
Include the current value of securities held, loans extended, fees
due, and out-of-pocket
expenses for which the sponsor and its affiliates are awaiting
reimbursement. Provide
similar disclosure for the company s officers and directors, if
material.
32. Please highlight the risk that the sponsor will benefit from the
completion of a business
combination and may be incentivized to complete an acquisition of a
less favorable target
company or on terms less favorable to shareholders rather than
liquidate.
33. Please clarify if the sponsor and its affiliates can earn a positive
rate of return on their
investment, even if other SPAC shareholders experience a negative rate
of return in the
post-business combination company.
34. Please highlight the material risks to public warrant holders,
including those arising from
differences between private and public warrants. Clarify whether
recent common stock
trading prices exceed the threshold that would allow the company to
redeem public
warrants. Clearly explain the steps, if any, the company will take to
notify all
shareholders, including beneficial owners, regarding when the warrants
become eligible
for redemption.
35. Please disclose the sponsor and its affiliates total potential
ownership interest in the
combined company, assuming exercise and conversion of all securities.
36. Please revise the conflicts of interest discussion so that it
highlights all material interests
in the transaction held by the sponsor and the company s officers
and directors. This could
include fiduciary or contractual obligations to other entities as well
as any interest in, or
affiliation with, the target company. In addition, please clarify how
the board considered
those conflicts in negotiating and recommending the business
combination.
37. Please expand your disclosure regarding the sponsor s ownership
interest in the target
company. Disclose the approximate dollar value of the interest based
on the transaction
value and recent trading prices as compared to the price paid.
38. Revise your disclosure to show the potential impact of redemptions on
the per share value
of the shares owned by non-redeeming shareholders by including a
sensitivity analysis
Gianluca Tagliabue
Ermenegildo Zegna Holditalia S.p.A.
September 23, 2021
Page 8
showing a range of redemption scenarios, including minimum, maximum and
interim
redemption levels.
39. We note that certain shareholders agreed to waive their redemption
rights. Please describe
any consideration provided in exchange for this agreement.
40. Please revise to disclose all possible sources and extent of dilution
that shareholders who
elect not to redeem their shares may experience in connection with the
business
combination. Provide disclosure of the impact of each significant source
of dilution,
including the amount of equity held by founders, convertible securities,
including warrants
retained by redeeming shareholders, at each of the redemption levels
detailed in your
sensitivity analysis, including any needed assumptions.
41. Quantify the value of warrants, based on recent trading prices, that may
be retained by
redeeming stockholders assuming maximum redemptions and identify any
material
resulting risks.
42. It appears that underwriting fees remain constant and are not adjusted
based on
redemptions. Revise your disclosure to disclose the effective
underwriting fee on a
percentage basis for shares at each redemption level presented in your
sensitivity analysis
related to dilution.
43. Please highlight material differences in the terms and price of
securities issued at the time
of the IPO as compared to private placements contemplated at the time of
the business
combination. Disclose if the SPAC s sponsors, directors, officers or
their affiliates will
participate in the private placement.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Dale Welcome at 202-551-3865 or Anne Mcconnell at
202-551-3709 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Perry Hindin at 202-551-3444 or Jay Ingram at 202-551-3397 with any
other questions.
Sincerely,
FirstName LastNameGianluca Tagliabue
Division of
Corporation Finance
Comapany NameErmenegildo Zegna Holditalia S.p.A.
Office of
Manufacturing
September 23, 2021 Page 8
cc: Scott D Miller
FirstName LastName