Joint venture agreement signed with RR Group

Milan/Mumbai/Umbergaon - Gujarat, December 19th, 2011 – FILA – Fabbrica Italiana Lapis ed Affini and RR Group, a leading Indian group operating in the development, manufacturing, distribution, sales, export of finest school stationery products and owner of DOMS brand, founded in 1974, announced the signing of a Joint Venture agreement through the acquisition by FILA of a 18.5% interest in Writefine Products Private Limited (“WFPL”) with the option to increase its stake up to 50%.

 Following this transaction, FILA further consolidates its international presence and successfully continues the implementation of its own growth strategy based on acquisitions and partnerships. In addition, this agreement will allow FILA to enhance its production capacity, to secure the production of quality pencils and to become the first world manufacturer of wooden pencils. With over one billion people and a large proportion of children and young adults in its population, India offers a significantly large consumer base for FILA.

 “This agreement will allow FILA to obtain access to one of the most growing and emerging market in the world leveraging on RR Group’s experience and know-how of the Indian market” explains Mr. Massimo Candela, Chief Executive Officer of FILA. Furthermore, through WFPL, FILA will be able to deliver products with the best quality/cost ratio based on its unique commercial strategy which has allowed the firm to become a leading company in the branded stationery products”.

 “Partnering with a successful international player such as FILA is an extraordinary opportunity for the growth of our company and the development of our own brand DOMS together with FILA’s brands. While we continue to expand the penetration of DOMS brand and strengthen our distribution network in India, FILA’s international network and experience will allow us to boost our global presence and gain access to some of the most attractive international markets” says Mr. Santosh R. Raveshia, Chief Executive Officer of WFPL.

FILA's GROWTH STRATEGY CONTINUES

Under the stewardship of Massimo Candela, CEO and FILA’s majority shareholder, the company has experienced robust growth over the last ten years, tripling its sales to an estimated pre-closing for 2011 significantly above €200mln. The growth was achieved also through the acquisition of the US company Dixon Ticonderoga in 2005 and Germany’s Lyra in 2008 turning FILA into an international player. The group operates through a network of production facilities in Italy, France, Germany, Mexico and China with approximately 59% of sales generated in Europe, 25% in North America, 14% in Central America and 2% in Asia.

Over the years, the school supplies market has proven to be very resilient despite the general crisis and even in 2011 FILA is experiencing a strong growth in sales and an EBITDA above €30mln.

The transaction with WFPL will allow FILA to access one of the largest education markets with 1.3mln of schools in 2009 and more than 486mln of students expected by 2025. In addition, this transaction will allow FILA to establish a strong presence in India and other key emerging countries such as Sri Lanka, Middle East, amongst others.

FILA has been assisted by Leonardo&Co. as financial advisor, Salonia & Associati as legal advisor and AZB & Partners as local legal advisor.

RR Group has been assisted by Altaberke Capital Advisors as financial advisor, Darshika Thacker & Associates as tax advisor and ANS Law Associates as legal advisor.