Privalia Acquires German Leading Online Retailer Dress for Less

    LONDON, March 7, 2011 /PRNewswire/ --
    Highlights

    - Privalia to acquire Dress for Less, one of Germany's leading online
      fashion clothing and apparel retailers

    - Creation of a leading player in European online fashion retail with
      scale businesses in Spain, Italy and Germany. The acquisition
      significantly expands Privalia's European geographic reach and extends
      its business model into the open site, discount and full price segments

    - Privalia has raised EUR88 million in new equity from General Atlantic,
      Highland Capital Partners, Index Ventures and Insight Ventures Partners
      as part of the transaction

    - Managing partners of Dress for Less, Mirco Schultis and Holger
      Hengstler, to stay with Privalia and become significant shareholders

    - Privalia forecasts global triple-digit growth and combined sales in the
      region of EUR400 million in 2011

Privalia Venta Directa, S.L. ("Privalia" or the "Company" or the "Group"), the leading private online sales club with market leading positions in Spain, Italy, Brazil and Mexico, is pleased to announce today it has agreed to acquire 100% of Dress for Less ("DfL"), one of Germany's leading online clothing and apparel retailers from Palamon Capital Partners, a pan-European private equity firm.

Dress for Less was founded in 1999 and operates a distribution platform in the open site, discount and full price segments. It has more than 500,000 active customers and a total customer base of 1 million in more than 50 countries worldwide.

The acquisition will be funded through a combination of EUR88 million of new equity provided by General Atlantic LLC ("General Atlantic"), a leading global growth equity firm, Highland Capital Partners LLC ("Highland Capital Partners"), Index Ventures LLP ("Index Ventures") and Insight Venture Partners ("Insight Ventures Partners"), a debt facility and shares. As a result, the founders of DfL and managing partners Mirco Schultis and Holger Hengstler will become significant shareholders in Privalia.

This acquisition marks Privalia's first entry to the German market, and follows the Company completing a EUR70 million ($95 million) financing in October 2010 which was one of the largest capital raises in the private online sales sector globally. The previous financing was conducted to enable the Company to expand its leadership into new markets organically and through acquisitions. It was supported through equity investment by General Atlantic, Index Ventures and Highland Capital Partners.

Privalia was founded in Barcelona, Spain in 2006 by Lucas Carne and Jose-Manuel Villanueva and is the market leader in each country in which it currently operates: Spain, Brazil, Italy and Mexico. Privalia announced in February 2011 sales growth during 2010 of 140.6% to EUR168.4m. During 2010, Privalia started its Mexico operation, sold 8 million items and at the end of 2010 had over 6 million members. Privalia forecasts global triple-digit growth and combined sales in the region of EUR400 million in 2011.

Privalia was advised on the transaction by Jefferies International Limited, the global securities and investment banking firm and legal advisers Garrigues and Ashurst.

Commenting on the acquisition, Lucas Carne and Jose-Manuel Villanueva, Co-Founders of Privalia said:

"We are pleased to have agreed to acquire Dress for Less, a leading online retailer in Germany, the biggest and fastest growing economy in the EU. There are significant strategic and operational synergies in this partnership. This acquisition brings a significant geographic expansion, a leadership position in Germany and expands the Privalia business model, providing Privalia with a large and effective channel for the private sales return stock.

"Dress for Less is a quality business and we are delighted that Mirco Schultis and Holger Hengstler and their team are going to stay with the enlarged Group to continue to grow the business.

"Privalia will continue to review opportunities to enter new markets as well as focus on growing the Group organically and are confident in the outlook for 2011."

Mirco Schultis and Holger Hengstler, Managing Partners of Dress for Less said:

"Privalia is a very fast growth business and we are delighted that we have become part of it. Privalia has ambitious plans for continued expansion and Dress for Less will benefit greatly from the combination. We are excited about our future as part of the Group."

About Privalia

Privalia is a private sales club which organises the sale of leading name products at exceptional prices exclusively for club members. Established in Barcelona in 2006 by Lucas Carne and Jose-Manuel Villanueva, at present it has approximately 6 million members worldwide and is the leader in each of the markets on which it operates: Spain, Italy, Brazil and Mexico. The Group employs over 660 privalians (a term used to describe the team members) who work at offices in Barcelona, Milan, Sao Paulo and Mexico City.

About Dress4Less

Dress for Less was founded in 1999 by Mirco Schultis and Holger Hengstler and is a leading pure online fashion retailer based in Frankfurt, Germany. DfL operates a distribution platform in the open site, discount and full price segments. It has more than 500,000 active customers and a total customer base of 1 million in more than 50 countries worldwide. For more information, please visit DfL's website at http://www.dress-for-less.com.

About General Atlantic

General Atlantic is a leading global growth equity firm providing capital and strategic support for growth companies. General Atlantic combines a collaborative global approach, sector specific expertise, long-term investment horizon, and a deep understanding of growth drivers to partner with great management and build exceptional businesses worldwide. Established in 1980, General Atlantic manages approximately $15 billion in capital and has more than 75 investment professionals based in Greenwich, New York, Palo Alto, London, Duesseldorf, Hong Kong, Beijing, Mumbai and Sao Paulo. For further information and a listing of General Atlantic's public and private portfolio companies, please visit http://www.generalatlantic.com.

About Highland Capital Partners

Highland Capital Partners was founded with the mission of helping great people build great companies. Since its inception in 1988, the firm has taken a sector-focused approach to investing in exceptional communications, consumer, digital media, healthcare and information technology companies. With over $3 billion of committed capital and offices in Boston, Silicon Valley, Geneva and Shanghai, Highland has invested in and worked to create such firms as VistaPrint, Ask Jeeves, Avid Technology, CheckFree, Conor Medsystems, Coremetrics, lululemon athletica, Lycos, MapQuest, Navic Networks, Ocular Networks, Odyssey Healthcare, P.A. Semi, Quattro Wireless, Quigo, Starent Networks, Sybase and Telica. For more information, visit Highland's web site at http://www.hcp.com.

About Index Ventures

Index Ventures is a leading venture capital firm active in technology, biotech and clean tech venture investing since 1996. The firm is dedicated to helping entrepreneurial teams in the Information Technology and Life Science sectors build their companies into market defining global leaders. The firm has offices in Geneva, London and Jersey and focuses on investments from seed through growth stage companies. Index's current portfolio includes Adconion, ASOS, Boku, Criteo, Etsy, MOO, Ozon.ru and Trialpay. Exits of note include Betfair (BETS), Lovefilm (acquired by Amazon), Playfish (acquired by Electronic Arts), MySQL (acquired by Sun), Last.fm (CBS) and Skype. For more information, please visit http://www.indexventures.com.

About Insight Venture Partners

Insight Venture Partners is a leading private equity and venture capital firm focused onthe global software, internet and data services industries. Since 1995, Insight has provided flexible equity financing to support growth stage companies, and paired this with a team of experienced investors and operating executives to assist Company management teams achieve success. Headquartered in New York City, Insight Venture Partners has been recognized by Red Herring Magazine as one of the Top Ten venture investors globally. For more information visit http://www.insightpartners.com.

SOURCE Privalia