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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Information Required in Proxy Statement

Schedule 14A Information

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

Investindustrial Acquisition Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

     

  (2)  

Aggregate number of securities to which transaction applies:

 

     

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

  (4)  

Proposed maximum aggregate value of transaction:

 

     

  (5)  

Total fee paid:

 

     

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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LETTER TO SHAREHOLDERS OF INVESTINDUSTRIAL ACQUISITION CORP.

Investindustrial Acquisition Corp.

Suite 1, 3rd Floor, 11-12 St James’s Square

London, United Kingdom

Dear Investindustrial Acquisition Corp. Shareholder:

You are cordially invited to attend an extraordinary general meeting of Investindustrial Acquisition Corp., a Cayman Islands exempted company (“IIAC”), which will be held on December 15, 2021 at 9:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned (the “General Meeting”). The accompanying proxy statement/prospectus related to the General Meeting is dated November 29, 2021, and is expected to be first mailed or otherwise delivered to IIAC shareholders on or about November 29, 2021.

Due to the current novel coronavirus (“COVID-19”) global pandemic, there are restrictions in place in many jurisdictions relating to the ability to conduct in-person meetings. As part of our precautions regarding COVID-19, we are planning for the meeting to be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association.

On July 18, 2021, IIAC, Ermenegildo Zegna Holditalia S.p.A., a joint stock company incorporated under Italian law (which will be converted into a Dutch public limited liability company (naamloze vennootschap) to be renamed Ermenegildo Zegna N.V. upon the Conversion) (“Zegna”) and EZ Cayman, a Cayman Islands exempted company and wholly-owned subsidiary of Zegna (“Zegna Merger Sub”), entered into a business combination agreement (as it may be amended from time to time, the “Business Combination Agreement”), contemplating several transactions in connection with which Zegna will become the ultimate parent company of IIAC.

At the General Meeting, IIAC shareholders will be asked to consider and vote upon: (i) a proposal, as an ordinary resolution, to adopt and approve the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, and the transactions contemplated thereby (the “Business Combination Proposal” or “Proposal No. 1”) and (ii) a proposal, as a special resolution to authorize and approve the Merger and the Plan of Merger (each as defined below) between IIAC and Zegna Merger Sub in the form tabled at the General Meeting, which will be in the form attached to the accompanying proxy statement/prospectus as Annex B (the “Plan of Merger”) (the “Merger Proposal” or “Proposal No. 2”).

As further described in the accompanying proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, upon consummation of the Business Combination, among other things:

 

   

On the Closing Date (as defined in the accompanying proxy statement/prospectus) prior to the Effective Time (as defined in the accompanying proxy statement/prospectus), Ermenegildo Zegna Holditalia S.p.A. will implement a cross-border conversion, by means of the execution of a Dutch notarial deed of cross-border conversion and amendment of its articles of association, and transfer its legal seat from Italy to the Netherlands and become a Dutch public limited liability company (naamloze vennootschap) (the “Conversion”), upon which Ermenegildo Zegna Holditalia S.p.A. will change its name to Ermenegildo Zegna N.V.;

 

   

In connection with the Conversion, Zegna will undergo a share split, or other transaction with a similar effect, such that immediately following the Closing (as defined in the accompanying proxy statement/prospectus) the then-existing shareholders of Zegna will hold 155,400,000 Ordinary Shares (as defined below);

 

   

On the Closing Date following the Conversion and prior to the Effective Time, Strategic Holding Group S.à r.l., an affiliate of the IIAC Sponsor (the “FPA Purchaser”) shall purchase from IIAC and IIAC shall issue to such purchaser 22,500,000 Class A Shares for an aggregate purchase price of


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€184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate (as defined in the accompanying proxy statement/prospectus)), subject to adjustment in accordance with the terms of the Forward Purchase Agreement (as defined in the accompanying proxy statement/prospectus);

 

   

At the Effective Time, Zegna Merger Sub will merge with and into IIAC (the “Merger”), with IIAC as the surviving company (the “Surviving Company”) in the merger, and (i) each share in the capital of Zegna Merger Sub issued and outstanding immediately prior to the Effective Time (as defined in the accompanying proxy statement/prospectus) will be automatically cancelled and extinguished and converted into one ordinary share in the share capital of the Surviving Company, (ii) each Class A Share and Class B Share of IIAC (each term as defined in the accompanying proxy statement/prospectus and collectively, the “IIAC Ordinary Shares”) issued and outstanding immediately prior to the Effective Time will remain outstanding as one ordinary share of the Surviving Company for further contribution as a contribution in kind to Zegna in consideration for one ordinary share in the share capital of Zegna (the “Ordinary Shares”), (iii) each IIAC Public Warrant (as defined below) outstanding immediately prior to the Effective Time will automatically cease to represent a right to acquire one Class A Share and shall automatically represent, at the Effective Time, a right to acquire one Ordinary Share on the same contractual terms and conditions as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement (as defined in the accompanying proxy statement/prospectus), and (iv) each IIAC Private Placement Warrant (as defined in the accompanying proxy statement/prospectus) to acquire one IIAC Ordinary Share outstanding immediately prior to the Effective Time will be exchanged, at the Effective Time, for the issuance of a Zegna Private Placement Warrant (as defined in the accompanying proxy statement/prospectus) representing a right to acquire one Ordinary Share on the same contractual terms and conditions as those of the IIAC Private Placement Warrants as were in effect immediately prior to the Warrant Agreement Amendment (as defined in the accompanying proxy statement/prospectus) (collectively, the “Business Combination”);

 

   

Immediately following the Effective Time, Zegna will consummate the PIPE Financing (as defined below);

 

   

After the consummation of the PIPE Financing, the Surviving Company shall distribute an amount of cash equal to the Capital Distribution Amount (as defined in the accompanying proxy statement/prospectus) to Zegna by way of the Capital Distribution (as defined in the accompanying proxy statement/prospectus); and

 

   

Promptly following the Capital Distribution, Zegna shall acquire 54,600,000 Ordinary Shares from Monterubello (as defined in the accompanying proxy statement/prospectus) in exchange for the Cash Consideration.

Concurrently with the execution of the Business Combination Agreement, IIAC and Zegna entered into subscription agreements (the “PIPE Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to subscribe for, and Zegna has agreed to issue to such PIPE Investors, an aggregate of 25 million Ordinary Shares at $10.00 per share for an aggregate purchase price of $250,000,000 (the “PIPE Financing”) on the Closing Date, of which $6,200,000 will be funded by the FPA Purchaser, an affiliate of the IIAC Sponsor, $1,200,000 will be funded by Sergio P. Ermotti, currently the chairman of the IIAC Board and $3,600,000 will be funded by Ermenegildo Zegna di Monte Rubello. The Ordinary Shares to be issued pursuant to the PIPE Subscription Agreements will be issued in a private placement not registered under the Securities Act of 1933, as amended (the “Securities Act”). Zegna has agreed to grant the PIPE Investors certain registration rights in connection with the PIPE Financing. The PIPE Financing is contingent upon, among other things, the Closing.

Additionally, in connection with their entry into the Business Combination Agreement, IIAC and Zegna entered into a letter agreement with Investindustrial Acquisition Corp. L.P., an English limited partnership (the “IIAC Sponsor”) and the current independent directors of IIAC (together with the IIAC Sponsor, the “IIAC Initial Shareholders”) pursuant to which, among other things, each IIAC Initial Shareholder has agreed to (a) vote in favor of all the transaction proposals (including the Merger) to be voted upon at the General Meeting, including the approval of the Business Combination Agreement and the transactions contemplated thereby and (b) waive


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any adjustment to the conversion ratio set forth in the governing documents of IIAC or any other anti-dilution or similar protections with respect to the Class B Shares (whether as a result of the transactions contemplated by the PIPE Subscription Agreements, the Forward Purchase Agreement or otherwise), in each case, on the terms and subject to the conditions set forth therein.

In addition to the Business Combination Proposal, IIAC shareholders are being asked to consider and vote on a proposal, as an ordinary resolution, to postpone or adjourn the General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the General Meeting, (B) if as of the time for which the General Meeting is scheduled, there are insufficient IIAC Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the General Meeting, or (D) if IIAC shareholders redeem an amount of Class A Shares such that the condition (the “Aggregate Transaction Proceeds Condition”) to Zegna’s obligation to consummate the Business Combination that the amount of cash available for release in the Trust Account (as defined in the accompanying proxy statement/prospectus) (net of the aggregate amount of cash required to satisfy any exercise by IIAC shareholders of their right to have IIAC redeem their Class A Shares in connection with the Business Combination (the “Cash Redemption Amount”)) together with the Aggregate PIPE Proceeds (as defined in the accompanying proxy statement/prospectus) and the proceeds from the Forward Purchase Agreement be equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000 (or $619,300,000 in the aggregate at the Balance Sheet Exchange Rate) is not satisfied (the “Adjournment Proposal” or “Proposal No. 3”). The Adjournment Proposal will only be presented to IIAC shareholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, or in the event that IIAC shareholders redeem an amount of Class A Shares such that the Aggregate Transaction Proceeds Condition would not be satisfied. Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which each shareholder is urged to read carefully.

The Class A Shares, IIAC Public Units and IIAC Public Warrants (each term as defined in the accompanying proxy statement/prospectus) are currently listed on the New York Stock Exchange (“NYSE”) under the symbols “IIAC,” “IIAC.U” and “IIAC WS,” respectively. Upon the Closing, the IIAC securities will be delisted from NYSE. Zegna intends to apply to list the Ordinary Shares and Zegna Public Warrants (as defined in the accompanying proxy statement/prospectus) on NYSE under the symbols “ZGN” and “ZGN WS,” respectively, upon the Closing. We cannot assure you that the Ordinary Shares or Zegna Public Warrants will be approved for listing on NYSE.

Investing in Zegna’s securities involves a high degree of risk. See “Risk Factors” beginning on page 64 of the accompanying proxy statement/prospectus for a discussion of information that should be considered in connection with an investment in Zegna’s securities.

With respect to IIAC and the holders of the IIAC Ordinary Shares, the accompanying proxy statement/prospectus serves as a:

 

   

proxy statement for the general meeting of IIAC shareholders being held on December 15, 2021, at which IIAC shareholders will vote on, among other things, a proposal to adopt the Business Combination Agreement and approve the Business Combination, the Merger and the Plan of Merger; and

 

   

prospectus for the Ordinary Shares and Zegna Public Warrants that IIAC shareholders (including holders of shares purchased pursuant to the Forward Purchase Agreement) and public warrant holders will receive in the Business Combination.

Pursuant to IIAC’s amended and restated memorandum and articles of association, IIAC is providing its public shareholders with the opportunity to redeem, upon the Closing, Class A Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account that holds the proceeds (including interest accrued thereon, which shall be net of taxes


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payable) of the IIAC IPO and certain of the proceeds of the sale of the IIAC Private Placement Warrants (as defined in the accompanying proxy statement/prospectus). Redemptions referred to herein shall take effect as repurchases under IIAC’s amended and restated memorandum and articles of association. The per-share amount that IIAC will distribute to shareholders who properly redeem their Class A Shares will not be reduced by the aggregate deferred underwriting commission of approximately $14.1 million that IIAC will pay to the underwriters of the IIAC IPO (as defined in the accompanying proxy statement/prospectus) upon consummation of the Business Combination or any transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $402.5 million as of June 30, 2021, the estimated per Class A Share redemption price would have been approximately $10.00. The redemption rights include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify himself, herself or itself in writing and provide his, her or its legal name, phone number and address to Continental Stock Transfer & Trust Company (the “Transfer Agent”) in order to validly redeem his, her or its shares. Public shareholders may elect to redeem their shares even if they vote “for” the Business Combination Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the Class A Shares sold in the IIAC IPO (i.e., in excess of 6,037,500 Class A Shares), without IIAC’s prior consent. IIAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by IIAC’s public shareholders will reduce the amount in the Trust Account. The Business Combination Agreement provides that Zegna’s obligation to consummate the Business 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.

The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by IIAC’s public shareholders, the Aggregate Transaction Proceeds Condition is not met or is not waived, then Zegna may elect not to consummate the Business Combination. In addition, in no event will IIAC redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the IIAC amended and restated memorandum and articles of association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement. Holders of outstanding IIAC Public Warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement/prospectus assumes that none of IIAC’s public shareholders exercise their redemption rights with respect to their Class A Shares.

The IIAC Initial Shareholders have agreed to waive their redemption rights with respect to any IIAC Ordinary Shares they may hold (the “Founder Shares”) in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the IIAC Initial Shareholders own 20% of the issued and outstanding IIAC Ordinary Shares, including all of the Founder Shares. The IIAC Initial Shareholders, and the other directors and officers of IIAC have agreed to vote any IIAC Ordinary Shares owned by them in favor of the Business Combination and the transactions contemplated thereby. At the Effective Time, each Founder Share will be exchanged for one Zegna Share at the Closing, such that, assuming that (a) no Class A Shares are elected to be redeemed by IIAC’s public shareholders, (b) 25,000,000 Ordinary Shares are issued to the PIPE Investors in connection with the PIPE Financing (including 620,000 Ordinary Shares issued to the FPA Purchaser), (c) prior to the Closing no IIAC Public Warrants or Private Placement Warrants are exercised, (d) at or after the Closing no Zegna Public Warrants or Zegna Private Placement Warrants will be exercised, and (e) 900,000 Ordinary Shares are granted to Zegna’s management, the IIAC Sponsor and its Affiliates (including the FPA Purchaser) will hold approximately 11.1% excluding Escrowed Shares (as defined below) of the total number of Ordinary Shares outstanding after the consummation of the Business Combination. Under the same assumptions, but assuming that 25,250,000 Class A Shares or 12,625,000 Class A Shares are redeemed by public shareholders, the IIAC Sponsor and its Affiliates (including the FPA Purchaser) would hold, respectively, approximately 12.3% and 11.6% excluding Escrowed Shares (as defined below) of the total number of Ordinary Shares outstanding


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after the consummation of the Business Combination. 50% of the as-exchanged Founder Shares held by the IIAC Initial Shareholders will be freely tradable following the Business Combination and 50% of the as-exchanged Founder Shares held by the IIAC Initial Shareholders will be held in escrow and subject to the following release conditions (the “Escrowed Shares”), (i) 70% of the Escrowed Shares will be released to the IIAC Initial Shareholders when the share price of Zegna equals or exceeds $12.50 per share for any twenty trading days within any consecutive thirty trading day period commencing after the Closing and (ii) the remaining 30% of the Escrowed Shares will be released when the share price of Zegna equals or exceeds $15.00 per share for any twenty trading days within any consecutive thirty trading day period commencing after the Closing. Notwithstanding the foregoing, any Escrowed Shares not released in accordance with such conditions after the lapse of the seven-year anniversary of the Closing will be repurchased by Zegna for no consideration, and none of the IIAC Initial Shareholders shall have any rights with respect to such Escrowed Shares.

IIAC is providing the accompanying proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the General Meeting and at any adjournments or postponements of the General Meeting. Information about the General Meeting, the Business Combination and other related business to be considered by the IIAC shareholders at the General Meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the General Meeting, all IIAC shareholders are urged to read carefully and in their entirety the accompanying proxy statement/prospectus, including the Annexes thereto and the accompanying financial statements of Zegna and IIAC. In particular, you are urged to read carefully the section entitled “Risk Factors” beginning on page 64 of the accompanying proxy statement/prospectus.

After careful consideration, the IIAC Board has approved the Business Combination Agreement and the Business Combination, and recommends that IIAC shareholders vote “FOR” adoption of the Business Combination Agreement and approval of the Business Combination, the Merger and the Plan of Merger, and “FOR” all other proposals presented to the IIAC shareholders in the accompanying proxy statement/prospectus. When you consider the IIAC Board’s recommendation of these proposals, you should keep in mind that certain IIAC directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. Please see the section entitled “The Business Combination—Interests of Certain Persons in the Business Combination” in the accompanying proxy statement/prospectus for additional information.

The approval of each of the Business Combination Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued ordinary shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued ordinary shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting.

Your vote is very important. Whether or not you plan to attend the General Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus to ensure that your shares are represented at the General Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the General Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Business Combination Proposal is approved at the General Meeting. The Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the General Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the General Meeting in person, the


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effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the General Meeting. If you are a shareholder of record and you attend the General Meeting and wish to vote in person, you may withdraw your proxy at that time and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT IIAC REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED VOTE AT THE GENERAL MEETING. THE REDEMPTION RIGHTS INCLUDE THE REQUIREMENT THAT ANY BENEFICIAL OWNER ON WHOSE BEHALF A REDEMPTION RIGHT IS BEING EXERCISED MUST IDENTIFY HIMSELF, HERSELF OR ITSELF IN WRITING AND PROVIDE HIS, HER OR ITS LEGAL NAME, PHONE NUMBER AND ADDRESS TO THE TRANSFER AGENT IN ORDER TO VALIDLY REDEEM HIS, HER OR ITS SHARES. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of the IIAC Board, I would like to thank you for your support of IIAC and look forward to a successful completion of the Business Combination.

 

  Sincerely,
 

/s/ Sergio P. Ermotti

  Sergio P. Ermotti
  Chairman of the Board of Directors

November 29, 2021

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.


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ADDITIONAL INFORMATION

No person is authorized to give any information or to make any representation with respect to the matters that the accompanying proxy statement/prospectus describes other than those contained in the accompanying proxy statement/prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by IIAC or Zegna. The accompanying proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of the accompanying proxy statement/prospectus nor any distribution of securities made under the accompanying proxy statement/prospectus will, under any circumstances, create an implication that there has been no change in the affairs of IIAC or Zegna since the date of the accompanying proxy statement/prospectus or that any information contained herein is correct as of any time subsequent to such date.


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NOTICE OF EXTRAORDINARY GENERAL MEETING

OF INVESTINDUSTRIAL ACQUISITION CORP.

TO BE HELD DECEMBER 15, 2021

To the Shareholders of Investindustrial Acquisition Corp.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Investindustrial Acquisition Corp., a Cayman Islands exempted company (“IIAC”), which will be held on December 15, 2021 at 9:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned (the “General Meeting”).

Due to the current novel coronavirus (“COVID-19”) global pandemic, there are restrictions in place in many jurisdictions relating to the ability to conduct in-person meetings. As part of our precautions regarding COVID-19, we are planning for the meeting to be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association.

You are cordially invited to attend the General Meeting to conduct the following items of business and/or consider, and if thought fit, approve the following resolutions:

 

  1.

Business Combination Proposal RESOLVED, as an ordinary resolution, that, assuming the Merger Proposal is authorized, approved and confirmed, the Business Combination Agreement, dated as of July 18, 2021 (as it may be amended from time to time), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, by and among IIAC, Ermenegildo Zegna Holditalia S.p.A., a joint stock company incorporated under Italian law (which will be converted into a Dutch public limited liability company (naamloze vennootschap) and renamed Ermenegildo Zegna N.V., upon the conversion) (“Zegna”) and EZ Cayman, a Cayman Islands exempted company and wholly-owned subsidiary of Zegna (“Zegna Merger Sub”), and the consummation of the transactions contemplated thereby (collectively, the “Business Combination”) be authorized, approved and confirmed in all respects.

 

  2.

Merger Proposal — RESOLVED, as a special resolution, that, assuming the Business Combination Proposal is authorized, approved and confirmed, the Plan of Merger in the form tabled to the Extraordinary General Meeting (a draft of which is attached to the accompanying proxy statement/prospectus as Annex B), pursuant to which Zegna Merger Sub will merge with and into IIAC so that IIAC will be the surviving company and all the rights and obligations of Zegna Merger Sub will be assumed by IIAC by virtue of such merger pursuant to the Companies Act (2021 Revision) of the Cayman Islands, and the consummation of the merger and the remaining transactions contemplated thereby, be authorized, approved and confirmed in all respects; and IIAC be authorized to enter into the Plan of Merger.

 

  3.

Adjournment Proposal — RESOLVED, as an ordinary resolution, to adjourn the Extraordinary General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the Extraordinary General Meeting, (B) if as of the time for which the Extraordinary General Meeting is scheduled, there are insufficient Class A ordinary shares of IIAC and Class B ordinary shares of IIAC represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the Extraordinary General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the Extraordinary General Meeting, or (D) if IIAC shareholders redeem an amount of Class A ordinary shares of IIAC such that the condition to Zegna’s obligation to consummate the Business Combination that the amount of cash available for release in IIAC’s trust account (net of the aggregate amount of cash required to satisfy any exercise by


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  IIAC shareholders of their right to have IIAC redeem their Class A ordinary shares in connection with the Business Combination), which holds the proceeds from IIAC’s initial public offering consummated on November 23, 2020, together with the cash proceeds received by Zegna or any of its affiliates in respect of the subscription agreements entered into with certain investors and the proceeds from the Forward Purchase Agreement, dated as of November 18, 2020, be at least equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000 is not satisfied.

The above matters are more fully described in the accompanying proxy statement/prospectus, which also includes, as Annex A, a copy of the Business Combination Agreement and as Annex B, a copy of the Plan of Merger. You are urged to read carefully and in their entirety the accompanying proxy statement/prospectus, including the Annexes thereto and accompanying financial statements of Zegna and IIAC.

The record date for the General Meeting for IIAC shareholders is November 5, 2021. Only IIAC shareholders at the close of business on that date may vote at the General Meeting or any adjournment thereof. IIAC shareholders are entitled to one vote on each proposal presented at the General Meeting for each IIAC Ordinary Share held on the date of the General Meeting.

Pursuant to IIAC’s amended and restated memorandum and articles of association, IIAC is providing its public shareholders with the opportunity to redeem, upon the Closing, Class A Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Trust Account that holds the proceeds (including interest accrued thereon, which shall be net of taxes payable) of the IIAC IPO and certain of the proceeds of the sale of the IIAC Private Placement Warrants (as defined in the accompanying proxy statement/prospectus). Redemptions referred to herein shall take effect as repurchases under IIAC’s amended and restated memorandum and articles of association. The per-share amount that IIAC will distribute to shareholders who properly redeem their Class A Shares will not be reduced by the aggregate deferred underwriting commission of approximately $14.1 million that IIAC will pay to the underwriters of the IIAC IPO (as defined in the accompanying proxy statement/prospectus) upon consummation of the Business Combination or any transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $402.5 million as of June 30, 2021, the estimated per Class A Share redemption price would have been approximately $10.00. The redemption rights include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify himself, herself or itself in writing as a beneficial holder and provide his, her or its legal name, phone number and address to Continental Stock Transfer & Trust Company in order to validly redeem his, her or its shares. Public shareholders may elect to redeem their shares even if they vote “for” the Business Combination Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the Class A Shares sold in the IIAC IPO (i.e., in excess of 6,037,500 Class A Shares), without IIAC’s prior consent. IIAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by IIAC’s public shareholders will reduce the amount in the Trust Account. The Business Combination Agreement provides that Zegna’s obligation to consummate the Business 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 at least equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000.

The Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

The approval of each of the Business Combination Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued ordinary shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. The approval of the Merger Proposal requires a


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special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued ordinary shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. The IIAC Board recommends that you vote “FOR” each of these proposals.

 

  By Order of the Board of Directors
  By:   /s/ Sergio P. Ermotti
  Sergio P. Ermotti
  Chairman of the Board of Directors
  New York, New York

November 29, 2021

 


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TABLE OF CONTENTS

     Page  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     1  

CERTAIN DEFINED TERMS

     1  

PRESENTATION OF FINANCIAL INFORMATION

     8  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     9  

MARKET AND INDUSTRY INFORMATION

     9  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     10  

ENFORCEMENT OF CIVIL LIABILITIES

     12  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE GENERAL MEETING

     15  

SUMMARY

     38  

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ZEGNA

     55  

SUMMARY HISTORICAL FINANCIAL DATA OF IIAC

     60  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     62  

RISK FACTORS

     64  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     106  

GENERAL MEETING OF IIAC SHAREHOLDERS

     107  

THE BUSINESS COMBINATION

     118  

MATERIAL TAX CONSIDERATIONS

     152  

THE BUSINESS COMBINATION AGREEMENT AND ANCILLARY DOCUMENTS

     185  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     201  

BUSINESS OF ZEGNA AND CERTAIN INFORMATION ABOUT ZEGNA

     227  

ZEGNA’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     253  

BUSINESS OF IIAC AND CERTAIN INFORMATION ABOUT IIAC

     306  

IIAC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     319  

BOARD OF DIRECTORS AND SENIOR MANAGEMENT OF ZEGNA AFTER THE BUSINESS COMBINATION

     326  

DESCRIPTION OF ZEGNA SECURITIES

     336  

COMPARISON OF SHAREHOLDER RIGHTS

     352  

SHARES ELIGIBLE FOR FUTURE SALE

     365  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     367  

BENEFICIAL OWNERSHIP

     371  

PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL

     376  

PROPOSAL NO. 2 — THE MERGER PROPOSAL

     378  

PROPOSAL NO. 3 — THE ADJOURNMENT PROPOSAL

     380  

LEGAL MATTERS

     382  

EXPERTS

     382  

OTHER CONSIDERATIONS

     382  

HOUSEHOLDING INFORMATION

     383  

TRANSFER AGENT AND REGISTRAR

     383  

FUTURE SHAREHOLDER PROPOSALS

     383  

WHERE YOU CAN FIND MORE INFORMATION

     383  

INDEX TO FINANCIAL STATEMENTS

     FIN-1  

ANNEX A

     A-1  

ANNEX B

     B-1  

ANNEX C

     C-1  

ANNEX D

     D-1  

ANNEX E

     E-1  

ANNEX F

     F-1  

ANNEX G

     G-1  


Table of Contents
     Page  

ANNEX H

     H-1  

ANNEX I

     I-1  

ANNEX J

     J-1  

ANNEX K

     K-1  

ANNEX L

     L-1  

ANNEX M

     M-1  

ANNEX N

     N-1  

ANNEX O

     O-1  

ANNEX P

     P-1  

ANNEX Q

     Q-1  


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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”), by Zegna (File No. 333-259139), constitutes a prospectus of Zegna under Section 5 of the U.S. Securities Act of 1933, as amended, or the Securities Act, with respect to the Zegna securities to be issued to IIAC shareholders, if the business combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act, with respect to the general meeting of IIAC shareholders at which IIAC shareholders will be asked to consider and vote upon a proposal to adopt the Business Combination Agreement and approve the Business Combination by the approval and adoption of the Business Combination Proposal, among other matters.

CERTAIN DEFINED TERMS

In this proxy statement/prospectus:

Adjournment Proposal” means a proposal, as an ordinary resolution, to postpone or adjourn the General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the General Meeting, (B) if as of the time for which the General Meeting is scheduled, there are insufficient IIAC Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the General Meeting, or (D) if IIAC shareholders redeem an amount of Class A Shares such that the Aggregate Transaction Proceeds Condition is not satisfied.

Affiliate” means, with respect to any Person, any other Person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto. For the avoidance of doubt, IIAC shall be an Affiliate of Zegna following the Closing.

Aggregate PIPE Proceeds” means the cash proceeds to be received by Zegna in respect of the PIPE Financing.

Aggregate Transaction Proceeds” means the sum of (i) the amount of cash available for release from the Trust Account upon completion of the Business Combination (net of the Cash Redemption Amount), (ii) the Aggregate PIPE Proceeds and (iii) the proceeds from the Forward Purchase Agreement.

Aggregate Transaction Proceeds Condition” means the condition to Zegna’s obligation to consummate the Business Combination if the amount of cash available for release from the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds and the proceeds from the Forward Purchase Agreement is not equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000.

Ancillary Documents” means, collectively, the PIPE Subscription Agreements, Shareholders Agreement, Registration Rights Agreement, Lock-Up Agreements, Warrant Agreement Amendment, Warrant Assumption and Amendment Agreement, FPA Amendment, Zegna Articles of Association, Zegna Board Regulations, Terms and Conditions of the Zegna Special Voting Shares, Company Support Agreement, Long-Term Incentive Plan, Sponsor Letter Agreement, and each other agreement, document, instrument or certificate executed, or contemplated to be executed, in connection with the Transactions.

 

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Balance Sheet Exchange Rate” means the USD:EUR exchange rate of 0.8415, being the publicly available USD:EUR exchange rate on June 30, 2021.

Business Combination” means the Transactions.

Business Combination Agreement” means that certain Business Combination Agreement, dated as of July 18, 2021, by and among IIAC, Zegna, and Zegna Merger Sub which is attached hereto as Annex A, as it may be amended from time to time.

Business Combination Proposal” means a proposal, as an ordinary resolution, that the Business Combination Agreement, and the consummation of the transactions contemplated thereby be authorized, approved and confirmed in all respects.

Business Day” means a day, other than a Saturday or Sunday, on which commercial banks in New York, New York, George Town, Cayman Islands, Amsterdam, the Netherlands and Milan, Italy are open for the general transaction of business.

Capital Distribution” means a return of capital distribution under Cayman Islands law whereby, on the Closing Date, immediately following the PIPE Financing and prior to the Share Repurchase, IIAC will distribute the Capital Distribution Amount to Zegna.

Capital Distribution Amount” means an amount equal to (a) the sum of (i) the cash proceeds available for release to Zegna or any of its Affiliates (including, for the avoidance of doubt, IIAC) from the Trust Account in connection with the Transactions (which amount, for the avoidance of doubt and without duplication, shall be calculated after giving effect to any share redemptions by IIAC Shareholders) and (ii) the proceeds from the Forward Purchase, minus (b) (i) the transaction expenses as set out in the Business Combination Agreement and (ii) any additional amounts to be retained by IIAC as may be agreed in writing by Zegna and IIAC; provided, that IIAC may retain such amounts as may be required as a matter of Cayman Islands law.

Cash Consideration” means an amount of €455,000,000.

Cash Redemption Amount” means the aggregate amount of cash required to satisfy any valid exercise by IIAC shareholders of their right to have IIAC redeem their Class A Shares in connection with the Business Combination.

Cayman Islands Companies Act” means the Companies Act (As Revised) of the Cayman Islands, as amended, modified, re-enacted or replaced from time to time.

Class A Shares” means the Class A ordinary shares, par value $0.0001 per share, of IIAC.

Class B Shares” means the Class B ordinary shares, par value $0.0001 per share, of IIAC.

Closing” means the closing of the Forward Purchase, the Merger, the PIPE Financing, the Capital Distribution and the Share Repurchase.

Closing Date” means a date to be mutually agreed upon by IIAC and Zegna but no later than the fifth (5th) Business Day following the satisfaction (or, to the extent permitted by applicable law, waiver) of the conditions set forth in Article 7 of the Business Combination Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver of such conditions), on which date the Closing will occur.

Company Support Agreement” means the company support agreement, dated as of July 18, 2021, by and among IIAC, Zegna, and certain Zegna Shareholders, attached hereto as Annex C.

 

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Condition Precedent Proposals” means the Business Combination Proposal and the Merger Proposal.

Conversion” means the cross-border conversion whereby, on the Closing Date, Zegna will, by means of the execution of a Dutch notarial deed of cross-border conversion and amendment of its articles of association, transfer its legal seat from Italy to the Netherlands and become a Dutch public limited liability company (naamloze vennootschap), upon which Zegna will change its name to “Ermenegildo Zegna N.V.”

DCGC” means the Dutch Corporate Governance Code.

Disposition” has the meaning set forth in “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.

DOSs” means directly operated stores.

DTC” means direct-to-consumer.

Effective Time” means the date and time the Merger becomes effective, being the date and time at which the Plan of Merger and all other documentation and declarations required under Cayman Islands law in connection with the Merger shall have been duly filed with the Cayman Islands Registrar of Companies or a subsequent date and time as is agreed by IIAC and Zegna and specified in the such documents in accordance with Cayman Islands law.

Escrowed Shares” means 50% of the Ordinary Shares, rounded up to the nearest whole Ordinary Share, that will be issued to the IIAC Initial Shareholders in exchange for their Class B Shares, that will be held in escrow subject to the release conditions described in this proxy statement/prospectus.

Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

Forward Purchase” means the transactions contemplated by the Forward Purchase Agreement.

Forward Purchase Agreement” means the forward purchase agreement between IIAC and the FPA Purchaser, dated as of November 18, 2020, as amended on July 26, 2021.

Founder Shares” means the aggregate 10,062,500 Class B Shares that are currently owned by the IIAC Initial Shareholders, of which 9,937,500 shares are held by IIAC Sponsor, 75,000 shares are held by Sergio P. Ermotti and 25,000 shares are held by each of Dante Roscini and Tensie Whelan (for a combined total of 125,000 shares).

FPA Amendment” means the amendment to the Forward Purchase Agreement dated as of July 26, 2021, by and between IIAC and the FPA Purchaser, attached hereto as Annex E.

FPA Purchaser” means Strategic Holding Group S.à r.l., an affiliate of the IIAC Sponsor.

General Meeting” means the extraordinary general meeting of IIAC that is the subject of this proxy statement/prospectus.

Hedged Positions” means the hedging positions and arrangements that effectively transfer the economic interest of any member of the Sponsor Group or Other Class B Shareholder (as may be applicable) in Zegna to a third party (e.g., forward sale contracts); provided, that the definition of “Hedged Positions” shall not include hedging positions and arrangements (a) in which the economic interest of any member of the Sponsor Group or Other Class B Shareholder (as may be applicable) in Zegna is retained (e.g., pledges and margin loans),

 

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(b) that minimize exposure to certain risks independent of the business operations of Zegna (e.g., currency exchange swaps) or (c) that marginally cap or limit the upside/downside risk of any member of the Sponsor Group or Other Class B Shareholder (as may be applicable) while maintaining material economic exposure (e.g., puts, calls and collars). Treatment of hedging positions and arrangements (including puts, calls and collars) in which any member of the Sponsor Group or Other Class B Shareholder (as may be applicable) does not retain a material economic exposure shall be discussed in good faith between such member of the Sponsor Group or such Other Class B Shareholder (as may be applicable) and Zegna.

IASB” means the International Accounting Standards Board.

IFRS” means International Financial Reporting Standards as issued by the IASB.

IIAC” means Investindustrial Acquisition Corp., a Cayman Islands exempted company.

IIAC amended and restated memorandum and articles of association” means the amended and restated memorandum and articles of association of IIAC, effective October 27, 2020.

IIAC Annual Financial Statements” means the audited financial statements of IIAC as of December 31, 2020 for the period from September 7, 2020 (inception) to December 31, 2020, each prepared in accordance with U.S. GAAP, together with the notes thereto.

IIAC Board” means the board of directors of IIAC.

IIAC Initial Shareholders” means IIAC Sponsor, Sergio P. Ermotti, Dante Roscini and Tensie Whelan.

IIAC IPO” means IIAC’s initial public offering, consummated on November 23, 2020, of 40,250,000 IIAC Public Units (including 5,250,000 units sold pursuant to the underwriters’ exercise of their over-allotment option, consummated on November 27, 2020) at $10.00 per unit, with each unit consisting of one Class A Share and one-third of one IIAC Public Warrant.

IIAC Ordinary Shares” means collectively the Class A Shares and the Class B Shares.

IIAC Private Placement Warrants” means the warrants held by IIAC Sponsor that were issued in a private placement at the time of the IIAC IPO, each of which is exercisable for one Class A Share at an exercise price of $11.50 per share.

IIAC Public Units” means the units issued in the IIAC IPO, consisting of one Class A Share and one-third of one IIAC Public Warrant.

IIAC Public Warrants” means warrants to acquire Class A Shares, issued as part of units in the IIAC IPO, at an initial exercise price of $11.50 per share.

IIAC shareholder” means any holder of IIAC Ordinary Shares.

IIAC Sponsor” means Investindustrial Acquisition Corp. L.P., a limited partnership incorporated in England and Wales.

IIAC Sponsor Lock-Up Agreement” means the lock-up agreement, to be entered into at the Closing, by and among Zegna, IIAC Sponsor, the FPA Purchaser and the Other Class B Shareholders, which will be substantially in the form attached hereto as Annex K.

 

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IIAC Warrants” means, collectively, the IIAC Public Warrants and the IIAC Private Placement Warrants.

illustrative redemption scenario” has the meaning set forth in “Beneficial Ownership.

Investindustrial” means, as the context may require, Investindustrial Advisors Limited, its affiliates, funds managed or advised by it or by such affiliates and or subsidiaries of such funds, or all such entities taken together.

Investment Company Act” means the Investment Company Act of 1940, as amended.

IRS” means the U.S. Internal Revenue Service.

Lock-Up Agreements” means the Zegna Shareholders Lock-Up Agreement and the IIAC Sponsor Lock-Up Agreement.

Long-Term Incentive Plan” means the omnibus equity incentive plan that will be adopted by Zegna pursuant to the Business Combination Agreement.

Loyalty Register” has the meaning set forth in “Description of Zegna Securities—Loyalty Voting Structure.

maximum redemption scenario” has the meaning set forth in “Beneficial Ownership.

Merger” means the merger of IIAC with and into Zegna Merger Sub, with IIAC being the surviving company.

Merger Proposal” means a proposal, as a special resolution, that the Plan of Merger pursuant to which the Merger so that IIAC will be the surviving company and all the rights and obligations of Zegna Merger Sub will be assumed by IIAC by virtue of such Merger pursuant to the Cayman Islands Companies Act, and the consummation of the Merger and the remaining transactions contemplated thereby, be authorized, approved and confirmed in all respects; and IIAC be authorized to enter into the Plan of Merger.

Minimum Holding Requirement” means the beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act) by the Sponsor Group, of at least 5% of the issued and outstanding Ordinary Shares, excluding (i) any Hedged Positions as evidenced by the IIAC Sponsor in writing and (ii) any Escrowed Shares that have not been released from escrow to the applicable Sponsor Group member.

Monterubello” means Monterubello s.s., an Italian società semplice.

Morrow” means Morrow Sodali LLC, proxy solicitor to IIAC.

New Warrant Agreement” means the Warrant Agreement, to be entered into concurrently with the Closing, by and between Zegna, Computershare Trust Company, N.A., and Computershare Inc., attached hereto Annex N.

no redemption scenario” has the meaning set forth in “Beneficial Ownership.

NYSE” means the New York Stock Exchange.

Ordinary Shares means the ordinary shares, nominal value €0.02 per share, of Zegna following the Conversion.

Other Class B Shareholders” means Sergio P. Ermotti, Dante Roscini and Tensie Whelan.

 

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Person” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or other similar entity, whether or not a legal entity.

PIPE Financing” means the private placement of 25,000,000 Ordinary Shares to the PIPE Investors, for gross proceeds to Zegna in an aggregate amount of approximately $250,000,000, pursuant to the PIPE Subscription Agreements.

PIPE Investors” means the investors (including the Insider PIPE Subscribers in the PIPE Financing pursuant to the PIPE Subscription Agreements.

PIPE Subscription Agreements” means those certain subscription agreements entered into on July 18, 2021, among IIAC, Zegna and the PIPE Investors named therein relating to the PIPE Financing.

Plan of Merger” means, in connection with the Merger, the plan of merger between IIAC and Zegna Merger Sub in the form tabled at the General Meeting, which will be in the form attached hereto as Annex B.

public shareholders” means holders of public shares of IIAC, including the IIAC Initial Shareholders and the directors and officers of IIAC to the extent they hold public shares, provided, that any of the IIAC Initial Shareholders or the directors and officers of IIAC will be considered a “public shareholder” only with respect to any public shares held by them.

public shares” means Class A Shares originally included in the units issued in the IIAC IPO.

Registration Rights Agreement” means the registration rights agreement to be entered into at Closing, pursuant to which the IIAC Sponsor, the FPA Purchaser, the Other Class B Shareholders and the Zegna Shareholders will be granted certain registration rights with respect to their respective equity securities in Zegna, in each case, on the terms and subject to the conditions in such registration rights agreement, attached hereto as Annex J.

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

SEC” means the United States Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Share Repurchase” means the repurchase by Zegna of 54,600,000 Ordinary Shares from Monterubello in exchange for the Cash Consideration.

Shareholders Agreement” means the shareholders agreement to be entered into at Closing by and among Zegna, the IIAC Sponsor, Monterubello and Mr. Ermenegildo Zegna, attached hereto as Annex M.

Sponsor Group” means the IIAC Sponsor together with its Affiliates.

Sponsor Letter Agreement” means the letter agreement, dated as of July 18, 2021, by and between IIAC, the IIAC Initial Shareholders and Zegna, attached hereto as Annex D.

Sponsor Nominee” means the Zegna Non-Executive Director to be nominated by the IIAC Sponsor in accordance with the Zegna Articles of Association.

Surviving Company” means IIAC following the Merger.

 

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Terms and Conditions of the Zegna Special Voting Shares” means the terms and conditions that, immediately after the Closing, will apply to the issuance, allocation, acquisition, conversion, sale, holding, repurchase and transfer of the Zegna Special Voting Shares and certain aspects of the registration of the Ordinary Shares in the Loyalty Register.

Transactions” means the transactions contemplated by the Business Combination Agreement, including the Conversion, the Forward Purchase, the Merger, the PIPE Financing, the Capital Distribution and the Share Repurchase.

Transfer Agent” means Continental Stock Transfer & Trust Company.

Treasury Regulations” means the final, temporary, and (to the extent they can be relied upon) proposed regulations under the U.S. Tax Code, as promulgated from time to time (including corresponding and succeeding provisions) as in effect for the relevant taxable period.

Trust Account” means the trust account of IIAC that holds the proceeds from the IIAC IPO and certain of the proceeds from the sale of the IIAC Private Placement Warrants.

Trust Agreement” means the Investment Management Trust Account Agreement, dated November 23, 2020, between IIAC and the Trustee.

Trustee” means Continental Stock Transfer & Trust Company.

U.S. GAAP” means United States generally accepted accounting principles.

Warrant Agreement” means the Warrant Agreement, dated as of November 23, 2020, between IIAC and the Trustee.

Warrant Agreement Amendment” means the Warrant Agreement Amendment, to be entered into immediately prior to the Effective Time, by and between IIAC and the Transfer Agent, attached hereto as Annex O.

Warrant Assumption and Amendment Agreement” means the Warrant Assumption and Amendment Agreement, to be entered into as of or immediately prior to the Effective Time, by and among IIAC, Zegna, the Transfer Agent, Computershare Trust Company, N.A. and Computershare Inc., attached hereto as Annex P.

Zegna” means Ermenegildo Zegna Holditalia S.p.A., a joint stock company incorporated under Italian law, to be converted at the time of the Conversion into a Dutch public limited liability company (naamloze vennootschap) and renamed Ermenegildo Zegna N.V., together with its consolidated subsidiaries, or any one or more of them, as the context may require.

Zegna Annual Consolidated Financial Statements” means the audited consolidated financial statements of Zegna as of December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020, prepared in accordance with IFRS, together with the notes thereto.

Zegna Articles of Association” means the articles of association of Zegna, to be effective as of the consummation of the Conversion, an unofficial English translation of which is attached hereto as Annex H.

Zegna Board” means Zegna’s board of directors.

Zegna Board Regulations” means the regulations of the Zegna Board to become effective as of or shortly after the consummation of the Conversion, which will be substantially in the form attached hereto as Annex I.

Zegna Director” means a Zegna Executive Director or a Zegna Non-Executive Director.

 

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Zegna Executive Director” means an executive member of the Zegna Board.

Zegna Existing Shareholders” means, collectively, Monterubello and Ermenegildo Zegna.

Zegna General Meeting” means, following the Conversion, the corporate body that consists of the shareholders of Zegna and all other Persons with meeting rights and also the meeting in which shareholders of Zegna and all other Persons with meeting rights assemble, as the case may be.

Zegna Merger Sub” means EZ Cayman, a Cayman Islands exempted company.

Zegna Non-Executive Director” means a non-executive member of the Zegna Board.

Zegna Pre-Conversion Ordinary Shares” means the ordinary shares of Zegna, nominal value €1.00 each, prior to the Conversion.

Zegna Private Placement Warrants” means warrants to acquire Ordinary Shares on the same contractual terms and conditions as the IIAC Private Placement Warrants.

Zegna Public Warrants” means warrants to acquire Ordinary Shares on the same contractual terms and conditions as the IIAC Public Warrants.

Zegna Shareholders” means, collectively, Monterubello, Ermenegildo Zegna and the other shareholders of Zegna immediately prior to the Closing.

Zegna Shareholders Lock-Up Agreement” means the lock-up agreement, to be entered into at the Closing, by and among Zegna and the Zegna Shareholders, which will be substantially in the form attached hereto as Annex L.

Zegna Special Voting Shares” means, collectively, the Zegna Special Voting Shares A, the Zegna Special Voting Shares B and the Zegna Special Voting Shares C.

Zegna Special Voting Shares A” means the special voting shares class A, nominal value of €0.02 per share, of Zegna following the Conversion.

Zegna Special Voting Shares B” means the special voting shares class B, nominal value of €0.08 per share, of Zegna following the Conversion.

Zegna Special Voting Shares C” means the special voting shares class C, nominal value of €0.18 per share, of Zegna following the Conversion.

Zegna Warrants” means, collectively, the Zegna Public Warrants and the Zegna Private Placement Warrants.

For more information about factors that affect the assumptions above, please see the section entitled “Beneficial Ownership.”

PRESENTATION OF FINANCIAL INFORMATION

Presentation of Financial Information

This proxy statement/prospectus contains:

 

   

the audited consolidated financial statements of Zegna as of December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020, prepared in accordance with

 

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International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) (such audited consolidated financial statements, together with the notes thereto, the “Zegna Annual Consolidated Financial Statements”). The Zegna Annual Consolidated Financial Statements have been restated as discussed in Note 43 thereof;

 

   

the unaudited interim condensed consolidated financial statements of Zegna as of June 30, 2021 and for the six months ended June 30, 2021 and 2020, prepared in accordance with IAS 34 - Interim Financial Reporting (“IAS 34”) (such unaudited financial statements, together with the notes thereto, the “Zegna Semi-Annual Unaudited Condensed Consolidated Financial Statements”);

 

   

the audited financial statements of IIAC as of December 31, 2020 and for the period from September 7, 2020 (inception) to December 31, 2020, each prepared in accordance with U.S. GAAP (such audited financial statements, together with the notes thereto, the “IIAC Annual Financial Statements”). The IIAC Annual Financial Statements have been restated as discussed in Note 2 thereof;

 

   

the unaudited condensed financial statements of IIAC as of September 30, 2021, and for the three and nine months ended September 30, 2021 (such unaudited condensed financial statements prepared in accordance with U.S. GAAP). The unaudited condensed financial statements have been restated as discussed in Note 2 thereof;

 

   

the unaudited pro forma condensed combined financial information of Zegna as of and for the six months ended June 30, 2021 and for the year ended December 31, 2020, prepared in accordance with Article 11 of SEC Regulation S-X.

Unless indicated otherwise, financial data presented in this document has been taken from the IIAC Annual Financial Statements included in this document, and the Zegna Annual Consolidated Financial Statements included in this document. Where information is identified as “unaudited,” it has not been subject to an audit.

Conventions which Apply to this Proxy Statement/Prospectus

In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:

 

   

“$,” “USD” and “U.S. dollar” each refer to the United States dollar, the currency of the United States of America; and

 

   

“€,” “EUR” and “Euro” each refer to the Euro, the currency issued by the European Central Bank.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This proxy statement/prospectus includes trademarks, tradenames and service marks, certain of which belong to Zegna and others that are the property of other organizations. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this proxy statement/prospectus are presented without the ® and symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this proxy statement/prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

MARKET AND INDUSTRY INFORMATION

Information contained in this proxy statement/prospectus concerning the market and the industry in which Zegna competes, including its market position, general expectations of market opportunity and market

 

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size, is based on information from various third-party sources, assumptions made by Zegna based on such sources and Zegna’s knowledge of the personal luxury goods market. This information and any estimates provided herein involve numerous assumptions and limitations, and you are cautioned not to give undue weight to such information. Third-party sources generally state that the information contained in such source has been obtained from sources believed to be reliable but that there can be no assurance as to the accuracy or completeness of such information. We have not independently verified any third-party information. The industry in which Zegna operates is subject to a high degree of uncertainty and risk. As a result, the estimates and market and industry information provided in this proxy statement/prospectus are subject to change based on various factors, including those described in the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors—Risks Related to Zegna’s Business Following the Business Combination” and elsewhere in this proxy statement/prospectus. The information relating to the industry contained in the section entitled “Business of Zegna and Certain Information About Zegna—Industry,” unless otherwise indicated, has been based on the Bain-Altagamma 2020 Worldwide Luxury Market Monitor, dated November 18, 2020 and the Bain-Altagamma Luxury Goods Worldwide Market Study, Spring 2021, dated May 17, 2021.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements. Forward-looking statements provide the respective current expectations or forecasts of future events of Zegna and IIAC. Forward-looking statements include statements about Zegna’s and IIAC’s respective expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” and “would,” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this proxy statement/prospectus include, but are not limited to, statements regarding Zegna’s disclosure concerning Zegna’s operations, cash flows, financial position and dividend policy.

Forward-looking statements appear in a number of places in this proxy statement/prospectus including, without limitation, in the sections titled “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “IIAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business of IIAC and Certain Information About IIAC” and “Business of Zegna and Certain Information About Zegna.” Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. The risks and uncertainties include, but are not limited to:

 

   

the ability of IIAC and Zegna to complete the Business Combination in a timely manner or at all, or, if IIAC does not consummate such Business Combination, the ability of IIAC to complete any other initial business combination;

 

   

the satisfaction of the conditions to the consummation of the Business Combination;

 

   

the occurrence of any event, change or other circumstance that could give rise to the termination of the Business Combination Agreement;

 

   

the incurrence of significant transaction and transition costs in connection with the Business Combination;

 

   

the amount of redemption requirements made by holders of Class A Shares;

 

   

the impact of COVID-19 or similar public health crises on Zegna’s business or the Business Combination;

 

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the outcome of any legal proceedings that may be instituted against Zegna or IIAC related to the Business Combination;

 

   

the effect of the announcement and pendency of the Business Combination on Zegna’s business, cash flows, financial condition or results of operations;

 

   

the exercise by contractual counterparties of rights arising as a result of the Business Combination under the provisions included in agreements to which Zegna is a party, and the potential impact of the announcement and pendency of the Business Combination on Zegna’s existing agreements with third parties;

 

   

the ability of Zegna to safeguard the recognition, integrity and reputation of its brands and to identify and respond to new and changing customer preferences;

 

   

the ability of Zegna to successfully implement its strategy;

 

   

disruptions to Zegna’s manufacturing and logistics facilities, as well as directly operated stores (“DOSs”), including as a result of the COVID-19 pandemic;

 

   

risks related to the operation of Zegna’s DOSs, including as a result of difficulties in renewing the existing lease agreements, an increase in rental charges or a decline in sales, and the operation of points of sale by third parties in the wholesale channel;

 

   

fluctuations in the price or quality of, or disruptions in the availability of, raw materials used by Zegna for its products, which could cause Zegna to incur increased costs, disrupt its manufacturing processes or prevent or delay Zegna from meeting its customers’ demand;

 

   

the ability of Zegna to negotiate, maintain or renew license agreements and strategic alliances;

 

   

shifts in travel patterns or declines in travel volumes, including as a result of the COVID-19 pandemic;

 

   

the ability to attract and retain key senior personnel and preserve craftmanship skills;

 

   

Zegna’s ability to protect its intellectual property rights;

 

   

disruptions or breaches compromising Zegna’s information technology systems or the personal information of Zegna’s customers;

 

   

Zegna’s ability to obtain or maintain Zegna’s securities’ listing on the NYSE;

 

   

the fact that the market price of IIAC’s and Zegna’s securities may be volatile due to a variety of factors;

 

   

the ability to develop and maintain effective internal controls;

 

   

material weaknesses have been identified in Zegna’s internal control over financial reporting and if Zegna fails to remediate these material weaknesses or maintain an effective system of internal controls, it may not be able to produce timely and accurate financial statements or comply with applicable laws and regulations;

 

   

changes in local economic, business, regulatory, social and political conditions, as well as changes in general economic conditions and in demand for luxury goods;

 

   

exchange rate fluctuations, interest rate changes, credit risk and other market risks;

 

   

the high levels of competition in the luxury goods market;

 

   

compliance with laws, including laws and regulation related to intellectual property, competition, product safety, packaging and labeling, import and processing of certain raw materials and finished goods, data protection, limits on cash payments, worker health and safety and the environment;

 

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changes in trade policy, the imposition of tariffs, the enactment of tax reforms and other changes in laws and regulations;

 

   

disruptions arising from political, social and economic instability, or civil unrest; and

 

   

other factors discussed elsewhere in this proxy statement/prospectus and in the section in “Risk Factors.”

Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in “Risk Factors” in this proxy statement/prospectus. Accordingly, you should not rely on such forward-looking statements, which speak only as of the date of this proxy statement/prospectus. Zegna and IIAC undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks Zegna describes in the reports it will file from time to time with the SEC after the date of this proxy statement/prospectus.

In addition, statements that “Zegna believes” or “IIAC believes” and similar statements reflect Zegna’s and IIAC’s respective beliefs and opinions on the relevant subject. These statements are based on information available to them as of the date of this proxy statement/prospectus, and while Zegna and IIAC respectively believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Zegna’s and IIAC’s statements should not be read to indicate that they have respectively conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.

Although Zegna and IIAC respectively believe the expectations reflected in the forward-looking statements were reasonable at the time made, they cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Zegna, nor IIAC nor any other person assumes responsibility for the accuracy or completeness of such forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward looking statements contained in this proxy statement/prospectus and any subsequent written or oral forward-looking statements that may be issued by Zegna, IIAC or persons acting on their behalf.

ENFORCEMENT OF CIVIL LIABILITIES

Enforcement of Civil Liabilities against Zegna

As of the time of the Conversion, Zegna will be a public limited liability company (naamloze vennootschap, or N.V.) organized under the laws of the Netherlands with its corporate seat in Amsterdam, the Netherlands. A majority of its directors and senior management, and certain experts named in this proxy statement/prospectus, reside outside of the United States. All or a substantial portion of the assets of such individuals and of Zegna are located outside of the United States. As a result, it may not be possible to effect service of process within the United States upon such individuals or Zegna, or it may be difficult to enforce against such individuals or Zegna in United States courts judgments obtained in such courts predicated upon the civil liability provisions of the federal securities laws of the United States.

Zegna may comply with a U.S. judgment voluntarily, but, if it were not to do so, application to a Dutch court for an original judgment would be necessary. Consequently, it could prove difficult to enforce civil liabilities solely based on U.S. securities law in the Netherlands. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in the Netherlands.

A judgment in a civil or commercial matter rendered by a U.S. court cannot be enforced in the Netherlands. However, if a person has obtained a final judgment without appeal in such a matter rendered by a

 

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U.S. court which is enforceable in the U.S., the Dutch court will generally recognize and give effect to the judgment insofar as it finds that:

 

   

the jurisdiction of the U.S. court has been based on an internationally accepted ground;

 

   

proper legal procedures have been observed;

 

   

the final judgment does not contravene Dutch public policy; and

 

   

the final judgment is not irreconcilable with a judgment of a Dutch court or an earlier judgment of a foreign court that is capable of being recognized in the Netherlands.

If a Dutch court finds these criteria are met, that court generally will render the same judgment without litigating again on the merits, thus granting an enforceable title in the Netherlands.

Shareholders may originate actions in the Netherlands based upon applicable Dutch laws.

In the event that a third party is liable to Zegna, only Zegna itself can bring civil action against that party. The individual shareholders do not have the right to bring an action on behalf of Zegna. Only in the event that the cause for the liability of a third party to Zegna also constitutes a tortious act directly against a shareholder, that shareholder does have an individual right of action against such third party in its own name.

The Netherlands has two specific collective redress regimes: collective settlements procedure (WCAM) and collective actions. The collective action may result in a declaratory judgment (verklaring voor recht) or an order for payment of monetary damages. Such collective action is only open to foundations or associations that satisfy certain requirements. The foundation or association and the defendant may also reach a settlement. Under the WCAM procedure, the Amsterdam court may declare such settlement agreement binding upon all the injured parties with an opt-out choice for an individual injured party. An individual injured party may also itself institute a civil claim for damages.

Enforcement of Civil Liabilities against IIAC

Because IIAC is currently incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests and your ability to protect your rights in U.S. federal courts may be limited. For example, it may be difficult for investors to effect service of process within the United States upon IIAC’s directors or executive officers, or enforce judgments obtained in the U.S. courts against IIAC’s directors or officers.

IIAC’s corporate affairs are governed by the amended and restated memorandum and articles of association, the Cayman Islands Companies Act and the common law of the Cayman Islands. IIAC’s directors’ fiduciary duties and the rights of shareholders to take action against the directors under the laws of the Cayman Islands are to a large extent governed by the common law of the Cayman Islands, which is derived in part from relatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of IIAC’s shareholders and the fiduciary responsibilities of directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court of the United States.

The courts of the Cayman Islands are unlikely (i) to recognize or enforce against IIAC judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state and (ii) in original actions brought in the Cayman Islands, to impose liabilities against

 

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IIAC predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

IIAC shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of IIAC or controlling shareholders than they would as public shareholders of a United States company.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

AND THE GENERAL MEETING

The questions and answers below highlight selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the General Meeting and the proposals to be presented at the General Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that may be important to IIAC shareholders. Shareholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the General Meeting, which will be held on December 15, 2021 at 9:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

IIAC Shareholders are being asked to consider and vote upon (i) a proposal to adopt the Business Combination Agreement and approve the transactions contemplated thereby, including the Business Combination, the Merger and the Plan of Merger, among other proposals.

In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things:

 

   

On the Closing Date prior to the Effective Time, Ermenegildo Zegna Holditalia S.p.A. will implement a cross-border conversion, by means of the execution of a Dutch notarial deed of cross-border conversion and amendment of its articles of association, and transfer its legal seat from Italy to the Netherlands and become a Dutch public limited liability company (naamloze vennootschap), upon which Ermenegildo Zegna Holditalia S.p.A. will change its name to Ermenegildo Zegna N.V.;

 

   

In connection with the Conversion, Zegna will undergo a share split, or other transaction with a similar effect, such that immediately following the Closing the Zegna Shareholders will hold 155,400,000 Ordinary Shares;

 

   

On the Closing Date following the Conversion and prior to the Effective Time, the FPA Purchaser shall purchase from IIAC and IIAC shall issue to such purchaser 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate), subject to adjustment in accordance with the terms of the Forward Purchase Agreement;

 

   

At the Effective Time, Zegna Merger Sub will merge with and into IIAC, with IIAC as the surviving company (the “Surviving Company”) in the merger, and (i) each share in the capital of Zegna Merger Sub issued and outstanding immediately prior to the Effective Time will be automatically cancelled and extinguished and converted into one ordinary share in the share capital of the Surviving Company, (ii) each Class A Share and Class B Share of IIAC issued and outstanding immediately prior to the Effective Time will remain outstanding as one ordinary share of the Surviving Company for further contribution as a contribution in kind to Zegna in consideration for one ordinary share in the share capital of Zegna, (iii) each IIAC Public Warrant outstanding immediately prior to the Effective Time will automatically cease to represent a right to acquire one Class A Share and shall automatically represent, at the Effective Time, a right to acquire one Ordinary Share on the same contractual terms and conditions as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement, and (iv) each IIAC Private Placement Warrant to acquire one IIAC Ordinary Share outstanding immediately prior to the Effective Time will be exchanged, at the Effective Time, for the issuance of a Zegna Private Placement Warrant representing a right to acquire one Ordinary Share on the same

 

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contractual terms and conditions as those of the IIAC Private Placement Warrants as were in effect immediately prior to the Warrant Agreement Amendment;

 

   

Immediately following the Effective Time, Zegna will consummate the PIPE Financing;

 

   

After the consummation of the PIPE Financing, the Surviving Company shall distribute an amount of cash equal to the Capital Distribution Amount to Zegna by way of a return of capital distribution under Cayman Islands law; and

 

   

Promptly following the capital distribution, Zegna shall acquire 54,600,000 Ordinary Shares from Monterubello s.s., an Italian società semplice, in exchange for the Cash Consideration.

A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A, and you are urged to read the Business Combination Agreement in its entirety.

This proxy statement/prospectus and its Annexes contain important information about the proposed Business Combination, the Merger and the other matters to be acted upon at the General Meeting. You should read this proxy statement/prospectus and the Annexes attached hereto carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and the Annexes attached hereto.

 

Q:

When and where is the General Meeting?

 

A:

The General Meeting will be held on December 15, 2021 at 9:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

Shareholders may attend the General Meeting in person, however in view of the ongoing COVID-19 pandemic, we are taking precautionary measures in line with the guidance from public health authorities and therefore encourage you to attend the General Meeting virtually. If you wish to attend the General Meeting in person, you must reserve your attendance at least two business days in advance of the General Meeting by contacting IIAC’s investor relations department at ir@investindustrial.com by 9:00 a.m., Eastern Time, on December 13, 2021 (two business days prior to the meeting date).

 

Q:

How do I attend the virtual General Meeting?

 

A:

If you are a registered shareholder, you will receive a proxy card from the Transfer Agent. The form contains instructions on how to attend the virtual General Meeting including the URL address, along with your control number. You will need your control number for access. If you do not have your control number, contact the Transfer Agent at 917-262-2373, or email proxy@continentalstock.com.

You can pre-register to attend the virtual General Meeting starting December 8, 2021 at 9:00 a.m., Eastern Time (five business days prior to the meeting date). Enter the URL address into your browser https://www.cstproxy.com/investindustrial/2021, enter your control number, name and email address. Once you pre-register you can vote or enter questions in the chat box. At the start of the General Meeting you will need to log in again using your control number and will also be prompted to enter your control number if you vote during the General Meeting.

Shareholders who hold their investments through a bank or broker, will need to contact the Transfer Agent to receive a control number. If you plan to vote at the General Meeting you will need to have a legal proxy from your bank or broker or if you would like to join and not vote, the Transfer Agent will issue you a guest control number with proof of ownership. Either way you must contact the Transfer Agent for specific instructions on how to receive the control number. The Transfer Agent can be contacted at the number or email address above. Please allow up to 72 hours prior to the meeting for processing your control number.

 

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If you do not have access to Internet, you can listen only to the meeting by dialing +1-877-770-3647 (or +1 312-780-0854 if you are located outside the United States and Canada (standard rates apply)) and when prompted enter the pin number 47784440#. Please note that you will not be able to vote or ask questions at the General Meeting if you choose to participate telephonically.

 

Q:

What are the specific proposals on which I am being asked to vote at the General Meeting?

 

A:

IIAC shareholders are being asked to approve the following three proposals at the General Meeting:

 

  1.

Business Combination Proposal to consider and vote upon a proposal by ordinary resolution that the Business Combination Agreement (a draft of which is attached to the accompanying proxy statement/prospectus as Annex A) and the consummation of the transactions contemplated thereby be authorized, approved and confirmed in all respects (Proposal No. 1).

  2.

Merger Proposal — to consider and vote upon a proposal by special resolution that the Plan of Merger in the form tabled to the General Meeting (a draft of which is attached to the accompanying proxy statement/prospectus as Annex B) pursuant to which Zegna Merger Sub will merge with and into IIAC so that IIAC will be the surviving company and all the rights and obligations of Zegna Merger Sub will be assumed by IIAC by virtue of such Merger pursuant to the Cayman Islands Companies Act, and the consummation of the Merger and the remaining transactions contemplated thereby, be authorized, approved and confirmed in all respects; and IIAC be authorized to enter into the Plan of Merger (Proposal No. 2).

 

  3.

Adjournment Proposal — to consider and vote upon a proposal by ordinary resolution to adjourn the General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the General Meeting, (B) if as of the time for which the General Meeting is scheduled, there are insufficient IIAC Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the General Meeting, or (D) if IIAC shareholders redeem an amount of Class A Shares such that the Aggregate Transaction Proceeds Condition is not satisfied (Proposal No. 3).

 

Q:

How will the COVID-19 pandemic impact in-person voting at the General Meeting?

 

A:

We intend to hold the General Meeting in person, although we intend to permit shareholders to participate in the meeting virtually over the Internet as well. However, we are sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving COVID-19 pandemic. As a result, we may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting). We plan to announce any such updates on our proxy website https://www.cstproxy.com/investindustrial/2021, and we encourage you to check this website prior to the meeting if you plan to attend in person.

 

Q:

Are the proposals conditioned on one another?

 

A:

The Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Business Combination Proposal and the Merger Proposal are conditioned upon the approval of each other. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that in the event the Business Combination Proposal or the Merger Proposal does not receive the requisite vote for approval, then IIAC will not consummate the Business Combination.

 

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If IIAC does not consummate the Business Combination and fails to complete an initial business combination by November 23, 2022, IIAC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such Trust Account to its public shareholders.

 

Q:

Why is IIAC proposing the Business Combination?

 

A:

IIAC is a blank check company, which was incorporated as a Cayman Islands exempted company on September 7, 2020. It was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more target businesses. Although IIAC may pursue an acquisition opportunity in any business, industry, sector or geographical region for purposes of consummating an initial business combination, IIAC has focused on industry sectors that can benefit from its management team’s established global relationships and operating experience. IIAC’s management team has extensive experience in identifying and executing strategic investments predominantly focused on European medium-sized companies and has done so successfully in a number of sectors including industrial manufacturing, healthcare and services, consumer and technology. IIAC is not permitted under its amended and restated memorandum and articles of association to effect a business combination with a blank check company or a similar type of company with nominal operations.

IIAC’s acquisition selection process leverages its management team’s and its advisors’ network of potential transaction sources, ranging from industry executives, private owners and entrepreneurs, private equity professionals and our extensive network of advisors and consultants across various sectors.

IIAC has deployed a proactive, thematic sourcing strategy and to focus on companies where it believes the combination of its operating experience, relationships, capital and capital markets expertise can be catalysts to transform companies and can help accelerate the target business’ growth and performance. In addition, IIAC has utilized the networks and industry experience of Investindustrial and its management team who, over the course of their careers, have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of acquisition opportunities.

Consistent with its strategy, IIAC identified the following general criteria and guidelines that it believes are important in evaluating potential target businesses. IIAC sought to acquire companies:

 

   

having an enterprise value in the range of $1.0-5.0 billion, which could use publicly-traded shares as equity to finance accretive acquisitions or organic growth, or to de-lever its balance sheet and which focus on consumer, healthcare, industrial and technology sectors;

 

   

with dynamic and high-quality businesses characterized by sustainable market growth drivers, market and product leadership and an attractive and scalable business model with sound economics; and

 

   

eligible to put in place specific initiatives aimed at creating sustainable value with a long term vision. Such initiatives would typically include, among others: investments in innovation and product development, cost optimization programs, geographic expansion, active M&A strategy driving market consolidations and Environmental, Social, and Corporate Governance (“ESG”) initiatives to improve resilience and minimize risk with a strong leadership team. IIAC would seek to partner with owners who are keen to retain significant ownership and a management team committed to accelerate growth and value creation.

Based on its due diligence investigations of Zegna and the industry in which it operates, including the financial and other information provided by Zegna in the course of negotiations, IIAC believes that Zegna meets the criteria and guidelines listed above. Please see the section entitled “The Business Combination—IIAC Board’s Reasons for Approval of the Business Combination” for additional information.

 

Q:

Why is IIAC providing shareholders with the opportunity to vote on the Business Combination?

 

A:

The approval of the Business Combination is required under the IIAC amended and restated memorandum and articles of association, and the Merger requires the approval of IIAC shareholders under Cayman

 

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  Islands law. In addition, such approvals are also conditions to the Closing under the Business Combination Agreement. Additionally, under its amended and restated memorandum and articles of association, IIAC must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of its initial business combination either in conjunction with a tender offer or in conjunction with a shareholder vote. For business and other reasons, IIAC has elected to provide its shareholders with the opportunity to have their public shares redeemed in connection with a shareholder vote rather than a tender offer. The redemption rights include the requirement that a holder must identify himself, herself or itself in writing as a beneficial holder and provide his, her or its legal name, phone number and address to the Transfer Agent in order to validly redeem his, her or its shares. Therefore, IIAC is seeking to obtain the approval of its shareholders of the Business Combination and also allow its public shareholders to effectuate redemptions of their public shares in connection with the Closing in accordance with the IIAC amended and restated memorandum and articles of association.

 

Q:

What is Zegna?

 

A:

Zegna is a leading global luxury group, founded in Trivero, Italy in 1910, and internationally recognized for the distinctive heritage of craftsmanship and design associated with its Zegna and Thom Browne brands and the noble fabrics and fibers of its in-house luxury textile and knitwear business. Zegna designs, manufactures, markets and distributes luxury menswear, footwear, leather goods and other accessories under the Zegna and the Thom Browne brands, and luxury womenswear and childrenswear under the Thom Browne brand. For further information, see “Business of Zegna and Certain Information About Zegna.”

 

Q:

What revenues and profits/losses has Zegna generated in the fiscal years ended 2020 and 2019, and in the six months ended June 30, 2021 and 2020?

 

A:

For the fiscal years ended December 31, 2020 and December 31, 2019, Zegna had total revenues of €1,014,733 thousand and €1,321,327 thousand, and (loss)/profit for the year of (€46,540) thousand and €25,439 thousand, respectively. At the end of fiscal year ended December 31, 2020, Zegna’s total assets were €2,415,054 thousand and its total liabilities were €1,770,020 thousand. For the six months ended June 30, 2021 and June 30, 2020, Zegna had total revenues of €603,340 thousand and €402,386 thousand, and profit/(loss) for the period of €32,234 thousand and (€87,755) thousand, respectively. At the end of the six months ended June 30, 2021, Zegna’s total assets were €2,468,504 thousand and its total liabilities were €1,764,824 thousand. For additional information, please see the Zegna Annual Consolidated Financial Statements and section “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

Q:

What impact will the COVID-19 pandemic have on the Business Combination?

 

A:

Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on the business of IIAC and Zegna, and there is no guarantee that efforts by IIAC and Zegna to address the adverse impacts of the COVID-19 will be effective. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including ongoing developments in the pandemic, the success of containment measures, vaccination campaigns and other actions taken by governments around the world, as well as the overall condition and outlook of the global economy. If IIAC or Zegna are unable to recover from a business disruption on a timely basis, the Business Combination and Zegna’s business, financial condition and results of operations following the completion of the Business Combination would be adversely affected. The Business Combination may also be delayed and adversely affected by developments in the COVID-19 pandemic and become more costly. Each of IIAC and Zegna may also incur additional costs to remedy damages caused by any such disruptions, which could adversely affect its financial condition and results of operations.

 

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Q:

What will happen in the Business Combination?

 

A:

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions set forth therein, IIAC and Zegna will effect a transaction that would replicate the economics of a merger of IIAC and Zegna through a merger of IIAC and Zegna Merger Sub and equity contributions and exchanges, which is collectively referred to as the Business Combination. To effect the Business Combination, among other things, Zegna, IIAC and their respective Affiliates will effect or cause to be effected (in each case as applicable) (i) the Conversion; (ii) the Forward Purchase; (iii) the Merger; (iv) the PIPE Financing; (v) the Capital Distribution; and (vi) the Share Repurchase. As a result of the Business Combination, Zegna will become the ultimate parent company of IIAC. Please see the section entitled “The Business Combination” for additional information.

 

Q:

Following the Business Combination, will IIAC’s securities continue to trade on a stock exchange?

 

A:

No. IIAC anticipates that, following consummation of the Business Combination, the IIAC Public Units will automatically separate into their component parts, the Class A Shares and IIAC Public Warrants, and will be delisted from NYSE and IIAC will be deregistered under the Exchange Act. However, Zegna intends to apply to list the Ordinary Shares and Zegna Public Warrants on NYSE under the symbols “ZGN” and “ZGN WS,” respectively, following the Closing.

 

Q:

Is the Business Combination the first step in a “going private” transaction?

 

A:

No. IIAC does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Zegna to access the U.S. public markets.

 

Q:

Will the management of Zegna change in the Business Combination?

 

A:

The current executive officers of Zegna are Ermenegildo Zegna di Monte Rubello, the Chief Executive Officer, Gianluca Ambrogio Tagliabue, the Chief Operating Officer and Chief Financial Officer, Alessandro Sartori, the Zegna Artistic Director, Franco Ferraris, the Head of Textiles, Thom Browne, the Founder and Chief Creative Officer of Thom Browne, and Rodrigo Bazan, the Chief Executive Officer of Thom Browne. These individuals are intended to continue to serve as Zegna’s executive officers upon the Closing.

Upon the Closing, Zegna will be governed through a single-tiered board of directors comprised of eleven members, with each director subject to annual re-election and appointed for a term ending at the close of the first annual general meeting following his or her appointment.

Please see the section entitled “Board of Directors and Senior Management of Zegna After the Business Combination—Senior Management of Zegna” for additional information.

 

Q:

What will IIAC shareholders receive in the Business Combination?

 

A:

Upon consummation of the Merger, each Class A Share and each Class B Share will be exchanged for one Ordinary Share through Computershare Trust Company, N.A. acting as exchange agent for the benefit and account of the former holders of the IIAC Ordinary Shares. The as-exchanged Class B Shares will be subject to the Escrow (as defined below) whereby 50% of the Escrowed Shares would continue to be held by their respective holders free and clear following the Closing and 50% of the Escrowed Shares would be held in escrow until the satisfaction of the relevant release conditions or lapse of the prescribed period of time. See the section entitled “Shares Eligible for Future Sale—Escrowed Shares.

 

Q:

What will IIAC warrant holders receive in the Business Combination?

 

A:

Upon consummation of the Merger, each outstanding IIAC Public Warrant will automatically cease to represent a right to acquire one Class A Share and shall automatically be converted to and represent,

 

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  at the Effective Time, a right to acquire one Ordinary Share on the same contractual terms and conditions as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement and each holder of IIAC Private Placement Warrants will exchange their IIAC Private Placement Warrants to Zegna for the issuance by Zegna of a corresponding number of Zegna Private Placement Warrants representing a right to acquire one Ordinary Share on the same contractual terms and conditions as those of the IIAC Private Placement Warrants as were in effect immediately prior to the Warrant Agreement Amendment.

 

Q:

What will IIAC unitholders receive in the Business Combination?

 

A:

In connection with the consummation of the Business Combination, the IIAC Public Units will automatically separate into their component parts, and holders of IIAC Public Units will receive one Ordinary Share for each Class A Share and one Zegna Public Warrant for each IIAC Public Warrant.

 

Q:

What will Zegna equityholders receive in the Business Combination?

 

A:

In connection with the Conversion, the share capital of Zegna will undergo a share split or other transaction with a similar effect, including a repurchase of outstanding shares or transfer of treasury shares to the Zegna Shareholders in order to ensure that, immediately following the Closing (including the Share Repurchase) the Zegna Shareholders will hold 155,400,000 Ordinary Shares (210,000,000 prior to the Share Repurchase). In connection with the Share Repurchase, Monterubello will sell to Zegna 54,600,000 Ordinary Shares in exchange for the Cash Consideration. The Share Repurchase is intended to reduce the equity stake of Monterubello (the holder of approximately 97.3% of the outstanding Zegna shares immediately prior to the Closing of the Business Combination) and increase the relative equity stake of the new Zegna shareholders following the Closing. This structure is intended to achieve the same result that would have been achieved in a cash/stock merger or in a traditional initial public offering through the sale of shares by selling shareholders. Zegna and IIAC agreed to the €455 million of Cash Consideration in the Business Combination Agreement, and it represents the pro rata portion (corresponding to the equity stake being sold by Monterubello) of the agreed €1.75 billion pre-money equity value at an implied share price of $10. See “Risk Factors—Risks Related to the Business Combination and IIAC—A significant portion of the proceeds of the Business Combination and the transactions contemplated by the Business Combination Agreement will be used to fund the Share Repurchase”. Based on the pre-money equity valuation, the post-closing company is expected to have an initial enterprise value of approximately $3.1 billion.

 

Q:

What are the material differences, if any, in the terms and price of securities issued at the time of IIAC’s initial public offering as compared to the securities that will be issued as part of the PIPE Financing at the Closing? Will the IIAC Sponsor or any of its directors, officers or affiliates participate in the PIPE Financing?

 

A:

IIAC Public Units were the units issued at the time of the IIAC IPO consisting of Class A Shares and IIAC Public Warrants, at an offering price per IIAC Public Unit of $10.00. At the Closing, the Class A Shares will convert into Ordinary Shares and the IIAC Public Warrants will convert into Zegna Public Warrants. The PIPE Investors will receive Ordinary Shares at a price per share of $10.00 as part of the PIPE Financing at the Closing, and will therefore hold the same security as the holders of Class A Shares immediately following the Business Combination, although the PIPE Investors as such will not receive any Zegna Public Warrants. The PIPE Financing will raise an aggregate of $250,000,000, of which $6,200,000 will be funded by the FPA Purchaser, an affiliate of the IIAC Sponsor, $1,200,000 will be funded by Sergio P. Ermotti, currently the chairman of the IIAC Board, and $4,200,000 will be funded by Ermenegildo Zegna di Monte Rubello.

 

Q:

What is the PIPE Financing?

 

A:

In connection with the Business Combination and concurrently with the execution of the Business Combination Agreement, IIAC and Zegna entered into the PIPE Subscription Agreements with the PIPE

 

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  Investors pursuant to which the PIPE Investors agreed to subscribe for, and Zegna agreed to issue to such PIPE Investors, an aggregate of 25,000,000 Ordinary Shares for gross proceeds of $250,000,000, at a purchase price of $10.00 per share, of which $6,200,000 will be funded by the FPA Purchaser, $1,200,000 will be funded by Sergio P. Ermotti, currently the chairman of the IIAC Board and $4,200,000 will be funded by Ermenegildo Zegna di Monte Rubello.

 

Q:

What equity stake will the current shareholders of IIAC, the PIPE Investors and the current shareholders of Zegna hold in Zegna immediately after the Closing?

 

A:

It is anticipated that, following the Closing, in a no redemption scenario: (i) IIAC’s public shareholders (other than the PIPE Investors) will own approximately 15.8% of the outstanding Ordinary Shares; (ii) the PIPE Investors (excluding the FPA Purchaser and Ermenegildo Zegna di Monte Rubello) will own approximately 9.4% of the outstanding Ordinary Shares; (iii) the Sponsor Group will own approximately 11.1% of the outstanding Ordinary Shares (excluding the Escrowed Shares), including shares owned by the FPA Purchaser; and (iv) the Zegna Existing Shareholders will own approximately 61.0% of the outstanding Ordinary Shares. These levels of ownership assume (A) that prior to the Closing no IIAC Public Warrants or IIAC Private Placement Warrants will be exercised and (B) that at or after the Closing no Zegna Public Warrants or Zegna Private Placement Warrants will be exercised. If all of the Zegna Private Placement Warrants and Zegna Public Warrants were exercisable and immediately exercised upon completion of the Business Combination on a 1:1 basis for cash, IIAC’s public shareholders (other than the PIPE Investors) would receive in aggregate approximately 19.6% of the Ordinary Shares on a fully diluted basis, and the Sponsor Group (excluding the Escrowed Shares) would receive in aggregate approximately 12.7% of the Ordinary Shares on a fully diluted basis assuming that the Sponsor Group does not transfer any of the IIAC Private Placement Warrants prior to the Closing or Zegna Private Placement Warrants at or after the Closing; however, the warrants are subject to restrictions on the timing of their exercise and may also be exercisable on a cashless basis by reference to the fair market value of the ordinary shares, and these percentages are therefore indicative only. As long as any Escrowed Shares are held in escrow, the IIAC Sponsor’s voting and economic rights shall be restricted. Therefore, the voting rights of such shareholders will slightly differ from the indicated ownership percentages.

For more information, please see the sections entitled “Beneficial Ownership” and “Unaudited Pro Forma Condensed Combined Financial Information.

 

Q:

Will IIAC or Zegna obtain new financing in connection with the Business Combination and are there any arrangements to help ensure that IIAC will have sufficient funds to consummate the Business Combination?

 

A:

Yes. Zegna will obtain new equity financing through a private placement of Ordinary Shares in the PIPE Financing. After payment of the Cash Redemption Amount, Cash Consideration and transaction expenses incurred in connection with the Business Combination, Zegna intends to use the Aggregate PIPE Proceeds, together with the proceeds received from the Trust Account, for general corporate purposes. The PIPE Financing is contingent upon, among other things, the Closing. The Business Combination Agreement provides that Zegna’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds and the proceeds from the Forward Purchase Agreement being equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000 (unless such condition is waived by Zegna).

 

Q:

Why is IIAC proposing the Adjournment Proposal?

 

A:

IIAC is proposing the Adjournment Proposal to allow the IIAC Board to adjourn the General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the General Meeting, (B) if as of the time for

 

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  which the General Meeting is scheduled, there are insufficient IIAC Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the General Meeting, or (D) if IIAC shareholders redeem an amount of Class A Shares such that the condition to Zegna’s obligation to consummate the Business Combination that the amount of cash available for release in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds and the proceeds from the Forward Purchase Agreement be equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000 is not satisfied. Please see the section entitled “Proposal No. 3—The Adjournment Proposal” for additional information.

 

Q:

What happens if I sell my Class A Shares before the General Meeting?

 

A:

The record date for the General Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your Class A Shares after the record date but before the General Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the General Meeting. However, you will not be able to redeem those shares for a pro rata portion of the proceeds held in the Trust Account because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your Class A Shares prior to the record date you will have no right to vote those shares at the General Meeting or seek redemption of your Class A Shares.

 

Q:

What vote is required to approve the proposals presented at the General Meeting?

 

A:

The approval of each of the Business Combination Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present the affirmative vote of the holders of at least a majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting.

The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting.

Accordingly, an IIAC shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of IIAC Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal, Adjournment Proposal or Merger Proposal. Broker non-votes will not be counted in connection with the determination of whether a valid quorum is established, and will have no effect on the Business Combination Proposal, Adjournment Proposal or Merger Proposal. Abstentions will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal. However, the NYSE requires that for the Business Combination Proposal, Adjournment Proposal or Merger Proposal to be approved, there must be more votes cast in favor of the proposal than the aggregate of votes against such proposal plus abstentions. Broker non-votes do not count as votes cast. Therefore, in order to maintain compliance with this NYSE requirement, abstentions will count as a vote “AGAINST” each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal.

 

Q:

What happens if the Business Combination Proposal is not approved?

 

A:

If the Business Combination Proposal is not approved, either Zegna or IIAC will be entitled to terminate the Business Combination Agreement and the Business Combination will not be consummated. If IIAC does not consummate a business combination by November 23, 2022, IIAC will be required to dissolve and liquidate the Trust Account.

 

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Q:

How many votes do I have at the General Meeting?

 

A:

IIAC shareholders are entitled to one vote on each proposal presented at the General Meeting for each IIAC Ordinary Share held of record as of the close of business on November 5, 2021, the record date for the General Meeting. As of the close of business on the record date, there were 50,312,500 outstanding IIAC Ordinary Shares.

 

Q:

What constitutes a quorum at the General Meeting?

 

A:

One or more shareholders who together hold a majority of the issued and outstanding IIAC Ordinary Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. Broker non-votes will not be counted as present for the purpose of determining a quorum. Abstentions will be considered present for the purposes of establishing a quorum. The IIAC Initial Shareholders, who own 20% of the issued and outstanding IIAC Ordinary Shares as of the record date, will count towards this quorum. As a result, as of the record date, in addition to the shares of the IIAC Initial Shareholders, an additional 15,093,751 IIAC Ordinary Shares, or approximately 30% of the IIAC Ordinary Shares, plus one IIAC Ordinary Share, held by public shareholders would be required to be present at the General Meeting to achieve a quorum. In the absence of a quorum, the chairman of the General Meeting has power to adjourn the General Meeting.

 

Q:

How will the IIAC Initial Shareholders and IIAC’s other current directors and officers vote?

 

A:

Prior to the IIAC IPO, IIAC entered into a letter agreement with the IIAC Initial Shareholders and each of its other directors and officers, pursuant to which each agreed to vote any IIAC Ordinary Shares owned by it in favor of an initial business combination. This agreement applies to the IIAC Initial Shareholders, including the IIAC Sponsor, as it relates to the Founder Shares and the requirement to vote all of the Founder Shares in favor of the Business Combination Proposal and for all other proposals presented to IIAC shareholders in this proxy statement/prospectus. The IIAC Initial Shareholders further entered into the Sponsor Letter Agreement with IIAC and Zegna with respect to the Business Combination, whereby the IIAC Initial Shareholders agreed to vote any IIAC Ordinary Shares owned by them in favor of the Business Combination. As of the record date, the IIAC Initial Shareholders and the other current directors and officers own 10,062,500 Founder Shares, representing 20% of the IIAC Ordinary Shares then outstanding and entitled to vote at the General Meeting.

 

Q:

What interests do the IIAC Initial Shareholders and IIAC’s other current officers and directors have in the Business Combination?

 

A:

The IIAC Initial Shareholders and IIAC’s other current officers and directors have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination Proposal.

These interests include, among others: the fact that the IIAC Sponsor and IIAC’s directors have agreed not to redeem any Class A Shares held by them in connection with a shareholder vote to approve a proposed initial business combination; the fact that the IIAC Sponsor and IIAC’s officers and directors will lose or waive certain rights (and the IIAC Sponsor may incur into certain liabilities) if IIAC fails to complete an initial business combination by November 23, 2022; the directors’ and officers’ liability insurance that Zegna will be required to maintain under the Business Combination Agreement; the fact that, pursuant to the Business Combination Agreement, the IIAC Sponsor will have certain governance rights in respect of Zegna; and the appointment of Andrea C. Bonomi and Sergio P. Ermotti as initial members of the Zegna Board following the Closing.

These interests also include the fact that the Sponsor Group paid an aggregate of approximately $235,575,000 for its investment in Zegna (including the FPA Purchaser’s investment in the PIPE Financing

 

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and the Forward Purchase), as summarized in the table below, and, following the consummation of the Business Combination, the aggregate value of Sponsor’s investment will be $292,303,275 (excluding the Escrowed Shares), based upon the respective closing prices of the Class A Shares and the IIAC Public Warrants on the NYSE on October 28, 2021.

Sponsor Group Ownership of IIAC Prior to Closing

 

     Securities held by Sponsor Group      Sponsor Cost at IIAC’s
initial public offering ($)
 

Class A Shares

     —          —    

Founder Shares

     9,937,500      $ 25,000  

IIAC Private Placement Warrants

     6,700,000      $ 10,050,000  
     

 

 

 

Total

      $ 10,075,000  

Sponsor Group Ownership of Zegna Following the Closing

 

     Securities held by
Sponsor Group Prior
to Closing
    Value per
Security ($)
     Sponsor Group
Cost at Closing ($)
    Total Value ($)  

Ordinary Shares Issued Pursuant to the PIPE Financing

     620,000       10.02      $ 6,200,000     $ 6,212,400  

Ordinary Shares Issued Pursuant to the Forward Purchase

     22,500,000       10.02        219,300,000 (1)    $ 225,450,000  

Ordinary Shares Issued to Holders of Founder Shares

     4,968,750 (2)      10.02        —       $ 49,786,875  

Zegna Private Placement Warrants

     6,700,000       1.62        —       $ 10,854,000  
       

 

 

   

 

 

 

Total

        $ 225,500,000     $ 292,303,275  

 

(1)

Under the Forward Purchase Agreement, the FPA Purchaser will purchase 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000, subject to adjustment in accordance with the terms of the Forward Purchase Agreement. The dollar amount listed in the chart is an approximate amount for illustrative purposes only and is based on the Balance Sheet Exchange Rate.

(2)

Excludes 4,968,750 Escrowed Shares which will be held in escrow until the satisfaction of the relevant release conditions or lapse of the prescribed period of time. As long as any such Escrowed Shares are held in escrow, the IIAC Sponsor’s voting and economic rights shall be restricted.

In addition, the IIAC Sponsor, IIAC’s executive officers and directors, and any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on IIAC’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. IIAC’s audit committee reviews on a quarterly basis all payments that were made to the IIAC Sponsor, IIAC’s executive officers or directors, or IIAC’s or their affiliates. Any such payments prior to an initial business combination are made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, IIAC does not have any additional controls in place governing IIAC’s reimbursement payments to IIAC’s directors and executive officers for their out-of-pocket expenses incurred in connection with IIAC’s activities on IIAC’s behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, is paid by IIAC to the IIAC Sponsor,

 

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IIAC’s executive officers and directors, or any of their respective affiliates, prior to completion of its initial business combination. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by IIAC’s executive officers and directors and there are no outstanding out-of-pocket expenses for which IIAC’s executive officers or directors are awaiting reimbursement.

See “The Business Combination—Interests of Certain Persons in the Business Combination” for a more detailed discussion of how the IIAC Initial Shareholders and IIAC’s other current officers and directors have interests in the merger that are different from, or in addition to, the interests of the IIAC public shareholders generally.

Such interests may influence the IIAC Board in making its recommendation that you vote in favor of the approval of the Business Combination.

 

Q:

Did the IIAC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

Yes. The IIAC Board obtained a fairness opinion from Mediobanca – Banca di Credito Finanziario S.p.A. (“Mediobanca”), dated July 16, 2021, which provides that, as of that date and based on and subject to the assumptions, qualifications and other matters set forth therein, the consideration to be paid by IIAC in the Merger is fair, from a financial point of view, to the holders of IIAC Ordinary Shares. For a description of the opinion issued by Mediobanca to the IIAC Board, please see “The Business Combination—Opinion of IIAC’s Financial Advisor.”

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A:

If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of holders of at least a majority of IIAC Ordinary Shares that are entitled to vote and are voted at the General Meeting, then the Business Combination Proposal will be approved and, assuming the approval of the Merger Proposal, and the satisfaction or waiver of the other conditions to Closing, the Business Combination will be consummated in accordance with the terms of the Business Combination Agreement.

If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of holders of at least a majority of IIAC Ordinary Shares that are entitled to vote and are voted at the General Meeting, then the Business Combination Proposal will fail and IIAC will not consummate the Business Combination. If IIAC does not consummate the Business Combination, it may continue to try to complete a business combination with a different target business until November 23, 2022. If IIAC fails to complete an initial business combination by November 23, 2022, then it will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to its public shareholders.

 

Q:

How do the Zegna Public Warrants differ from the Zegna Private Placement Warrants and what are the related risks for any holders of Zegna Public Warrants following the Business Combination?

 

A:

The Zegna Private Placement Warrants will be identical to the Zegna Public Warrants in all material respects, except that the Zegna Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and they will not be redeemable by Zegna so long as they are held by the IIAC Sponsor or its permitted transferees. The IIAC Sponsor, or its permitted transferees, will have the option to exercise the Zegna Private Placement Warrants on a cashless basis. If the Zegna Private Placement Warrants are held by holders other than the IIAC Sponsor or its permitted transferees, the Zegna Private Placement Warrants will be redeemable by Zegna in all redemption scenarios and exercisable by the holders on the same basis as the Zegna Public Warrants.

As a result, following the Business Combination, Zegna may redeem your Zegna Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby significantly impairing the value of such

 

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warrants. Zegna will have the ability to redeem outstanding Zegna Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which a notice of redemption is sent to the warrantholders. Zegna will not redeem the warrants as described above unless a registration statement under the Securities Act covering the Ordinary Shares issuable upon exercise of such warrants is effective and a current prospectus relating to those Ordinary Shares is available throughout the 30-day redemption period. If and when the Zegna Public Warrants become redeemable by Zegna, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Zegna Public Warrants could force you (i) to exercise your Zegna Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Zegna Public Warrants at the then-current market price when you might otherwise wish to hold your Zegna Public Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding Zegna Public Warrants are called for redemption, is likely to be substantially less than the market value of your Zegna Public Warrants.

In addition, Zegna will have the ability to redeem the outstanding Zegna Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the closing price of the Ordinary Shares equals or exceeds $10.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on the trading day prior to the date on which a notice of redemption is sent to the warrant holders. In such a case, the holders will be able to exercise their Zegna Public Warrants prior to redemption for a number of Ordinary Shares determined based on a table in which the number of Ordinary Shares is based on the redemption date and the fair market value of the Ordinary Shares. Recent trading prices for the Class A Shares have not exceeded the $10.00 per share threshold at which the Zegna Public Warrants would become redeemable. Please see the notes to IIAC’s financial statements included elsewhere in this proxy statement/prospectus. The value received upon exercise of the Zegna Public Warrants (1) may be less than the value the holders would have received if they had exercised their Zegna Public Warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the Zegna Public Warrants.

In each case, Zegna may only call the Zegna Public Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each holder, provided that holders will be able to exercise their Zegna Public Warrants prior to the time of redemption and, at Zegna’s election, any such exercise may be required to be on a cashless basis.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of Class A Shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the Closing, including interest (which interest shall be net of taxes payable), by (ii) the total number of then-outstanding public shares; provided that IIAC will not redeem any Class A Shares issued in the IIAC IPO to the extent that such redemption would result in IIAC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. A public shareholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the Class A Shares sold in the IIAC IPO, without IIAC’s prior consent. Holders of outstanding IIAC Public Warrants do not have redemption rights in connection with the Business Combination. The IIAC Initial Shareholders and IIAC’s other current officers and directors have agreed to waive their redemption rights with respect to any IIAC Ordinary Shares they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata

 

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  calculation used to determine the per-share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $402.5 million as of September 30, 2021, the estimated per Class A Share redemption price would have been approximately $10.00. Additionally, Class A Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest but net of taxes payable) in connection with the liquidation of the Trust Account, unless IIAC completes an alternative business combination prior to November 23, 2022.

 

Q:

Can the IIAC Initial Shareholders redeem their Founder Shares in connection with consummation of the Business Combination?

 

A:

No. The IIAC Initial Shareholders and IIAC’s other current officers and directors have agreed, for no additional consideration, to waive their redemption rights with respect to their Founder Shares and any public shares they may hold in connection with the consummation of the Business Combination.

 

Q:

Is there a limit on the number of shares I may redeem?

 

A:

Yes. A public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), may not redeem Class A Shares in excess of an aggregate of 15% of the shares sold in the IIAC IPO (i.e., in excess of 6,037,500 Class A Shares), without IIAC’s consent. Accordingly, all Class A Shares in excess of 15% of Class A Shares sold in the IIAC IPO owned by a holder will not be redeemed for cash without IIAC’s consent. On the other hand, a public shareholder who holds less than 15% of the public shares may redeem all of the public shares held by such shareholder for cash.

Class B Shares cannot be redeemed.

In no event is your ability to vote all of your shares (including those shares held by you in excess of 15% of the shares sold in the IIAC IPO) for or against the Business Combination restricted.

IIAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by IIAC public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $402.5 million as of September 30, 2021. The Business Combination Agreement provides that Zegna’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds and the proceeds from the Forward Purchase Agreement being equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000. If, as a result of redemptions of Class A Shares by IIAC’s public shareholders, such condition is not met or is not waived, then Zegna may elect not to consummate the Business Combination. In addition, in no event will IIAC redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the IIAC amended and restated memorandum and articles of association and as required as a Closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement.

 

Q:

Is there a limit on the total number of Class A Shares that may be redeemed?

 

A:

Yes. The IIAC amended and restated memorandum and articles of association provides that it may not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001 (such that IIAC is not subject to the SEC’s “penny stock” rules). Other than this limitation, the IIAC amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold. The Business Combination Agreement provides that, as a condition to each party’s obligation to consummate the Business Combination, IIAC may not have net tangible assets less than $5,000,001 at the Closing Date of the transactions contemplated by the Business Combination Agreement.

 

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  In addition, the Business Combination Agreement provides that each party’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds and the proceeds from the Forward Purchase Agreement being equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000. If, as a result of redemptions of Class A Shares by IIAC’s public shareholders, this condition is not met or is not waived, then Zegna may elect not to consummate the Business Combination. If the Business Combination is not consummated, IIAC will not redeem any Class A Shares and all Class A Shares submitted for redemption will be returned to the holders thereof, and IIAC instead may search for an alternative business combination.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your Class A Shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other proposal described by this proxy statement/prospectus. As a result, the Business Combination Agreement can be approved by shareholders who will redeem their shares and no longer remain shareholders, leaving shareholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer shareholders, potentially less cash and the potential inability to meet the listing standards of NYSE.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must (i) if you hold IIAC Public Units, separate the underlying Class A Shares and IIAC Public Warrants, and (ii) prior to 5:00 p.m., Eastern Time, on December 13, 2021 (two business days before the initial date of the General Meeting), tender your shares physically or electronically and identify yourself in writing as a beneficial holder and provide your legal name, phone number and address to the Transfer Agent in order to validly redeem your shares and submit a request in writing that IIAC redeem your Class A Shares for cash to the Transfer Agent at the following address:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, NY 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

You do not have to be a record date holder in order to exercise your redemption rights. IIAC shareholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is IIAC’s understanding that IIAC shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, IIAC does not have any control over this process and it may take longer than two weeks. IIAC shareholders who hold their shares in “street name” will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

IIAC shareholders seeking to exercise their redemption rights, whether they are registered holders or hold their shares in “street name” are required to either tender their certificates to the Transfer Agent prior to the date set forth in this proxy statement/prospectus, or up to two business days prior to the vote on the Business Combination Proposal at the General Meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s Deposit/Withdrawal At Custodian (DWAC) system, at such shareholder’s option. The requirement for physical or electronic delivery prior to the General Meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the Business Combination is approved.

Any request for redemption, once made by a holder of public shares, may not be withdrawn once submitted to IIAC unless the IIAC Board determines (in its sole discretion) to permit the withdrawal of such redemption request (which it may do in whole or in part). If you delivered your shares for redemption to the

 

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Transfer Agent and decide within the required timeframe not to exercise your redemption rights, you may request that the Transfer Agent return the shares (physically or electronically). The redemption rights include the requirement that a holder must identify himself, herself or itself in writing as a beneficial holder and provide his, her or its legal name, phone number and address to the Transfer Agent in order to validly redeem his, her or its shares. You may make such request by contacting the Transfer Agent at the phone number or address listed under the question “Who can help answer my questions?” below.

If you hold IIAC Public Units registered in your own name, you must deliver the certificate for such IIAC Public Units to the Transfer Agent with written instructions to separate such IIAC Public Units into Class A Shares and IIAC Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the IIAC Public Units.

If a broker, dealer, commercial bank, trust company or other nominee holds your IIAC Public Units, you must instruct such nominee to separate your IIAC Public Units. Your nominee must send written instructions by facsimile to the Transfer Agent. Such written instructions must include the number of IIAC Public Units to be split and the nominee holding such IIAC Public Units. Your nominee must also initiate electronically, using Depository Trust Company’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of Class A Shares and IIAC Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the IIAC Public Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your IIAC Public Units to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming shareholder. However, this fee would be incurred regardless of whether or not shareholders seeking to exercise redemption rights are required to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

 

Q:

What happens if a substantial number of the IIAC public shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A:

IIAC’s public shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of IIAC public shareholders are reduced as a result of redemptions by IIAC public shareholders.

If an IIAC public shareholder exercises its redemption rights, such exercise will not result in the loss of any warrants that it may hold. Assuming that 25,250,000 Class A Shares held by IIAC’s public shareholders (or approximately 62.7% of the Class A Shares outstanding) were redeemed, each of the retained outstanding IIAC Public Warrants (which will become Zegna Public Warrants following the Closing) would each have a value of approximately $1.62 per warrant based on the closing price of the IIAC Public Warrants on the NYSE on October 28, 2021. If a substantial number of, but not all, IIAC public shareholders exercise their redemption rights, but choose to exercise their retained warrants, any non-redeeming shareholders would experience dilution to the extent such warrants are exercised and additional Ordinary Shares are issued.

In no event will IIAC redeem its Class A Shares in an amount that would cause its (or Zegna’s after giving effect to the transactions contemplated by the Business Combination Agreement) net tangible assets to be less than $5,000,001, as provided in the IIAC amended and restated memorandum and articles of association and as required as a closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement.

 

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Additionally, as a result of redemptions, the trading market for the Ordinary Shares may be less liquid than the market for the Class A Shares was prior to consummation of the Business Combination and Zegna may not be able to meet the listing standards for NYSE or another national securities exchange.

The below sensitivity table shows the potential impact of redemptions on the pro forma book value per share of the shares owned by non-redeeming shareholders in a no redemption scenario, an illustrative redemption scenario, and a maximum redemption scenario, excluding the Escrowed Shares from the computation of Ordinary Shares outstanding. The sensitivity table below also sets forth (x) the potential additional dilutive impact of each of the below additional dilution sources in each redemption scenario, and (y) the effective underwriting fee incurred in connection with the IIAC IPO in each redemption scenario.

 

     Assuming
No Redemption(1)
    Assuming Illustrative
Redemption(2)
    Assuming Maximum
Redemption(3)
 

Shareholders

   Ownership
in shares
     Equity%     Ownership
in shares
     Equity%     Ownership
in shares
     Equity%  

Zegna Shareholders(4)

     155,400,000        62.4     155,400,000        65.7     155,400,000        69.4

IIAC Public Shareholders

     40,250,000        16.2     27,625,000        11.7     15,000,000        6.7

IIAC Sponsor(5)

     27,531,250        11.1     27,531,250        11.6     27,531,250        12.3

PIPE Investors

     25,000,000        10.0     25,000,000        10.6     25,000,000        11.2

Management Grants

     900,000        0.4     900,000        0.4     900,000        0.4
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Shares Outstanding Excluding Zegna Warrants and Escrowed Shares

     249,081,250        100     236,456,250        100     223,831,250        100
  

 

 

      

 

 

      

 

 

    

Total Pro Forma Equity Value

               

Post-Redemptions(6)

   $ 2,490,812,500        $ 2,364,562,500        $ 2,238,312,500     
  

 

 

      

 

 

      

 

 

    

Total Pro Forma Book Value Attributable to Parent

               

Post-Redemptions(7)

   $ 722,662,475        $ 596,412,801        $ 470,163,127     
  

 

 

      

 

 

      

 

 

    

Pro Forma Book Value Attributable to Parent Per Share

   $ 2.90        $
2.52
 
     $ 2.10     

 

     Assuming
No Redemption(1)
    Assuming Illustrative
Redemption(2)
    Assuming Maximum
Redemption(3)
 

Additional Dilution Sources

   Ownership
in Shares
     Equity%(8)     Ownership
in Shares
     Equity%(8)     Ownership
in shares
     Equity%(8)  

Zegna Warrants

               

Zegna Public Warrants

     13,416,667        4.9     13,416,667        5.2     13,416,667        5.4

Zegna Private Placement Warrants

     6,700,000        2.5     6,700,000        2.6     6,700,000        2.7

CEO IPO Performance Bonus

     600,000        0.2     600,000        0.2     600,000        0.2

CEO Long-Term Incentive Plan(9)

     2,520,000        0.9     2,520,000        1.0     2,520,000        1.0

Total Additional Dilution Sources

     23,236,667        8.5     23,236,667        8.9     23,236,667        9.4

 

     Assuming
No Redemption(1)
    Assuming Illustrative
Redemption(2)
    Assuming Maximum
Redemption(3)
 

Deferred Discount

   Amount ($)      % of Trust
Account
    Amount ($)      % of Trust
Account
    Amount ($)      % of Total
Account
 

Effective Deferred Discount(10)

   $ 14,087,500        3.5   $ 14,087,500        5.1   $ 14,087,500        9.4

 

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(1)

This scenario assumes that no Class A Shares are redeemed by IIAC’s public shareholders.

(2)

This scenario assumes that 12,625,000 Class A Shares are redeemed by IIAC’s public shareholders.

(3)

This scenario assumes that 25,250,000 Class A Shares are redeemed by IIAC’s public shareholders.

(4)

Excludes shares to be issued to certain Zegna Shareholders in connection with the PIPE Financing or as management grants.

(5)

Includes shares to be issued to the IIAC Sponsor, to the FPA Purchaser and to the Other Class B Shareholders but excludes shares to be issued to them in connection with the PIPE Financing.

(6)

Pro forma equity value shown at $10.00 per share in the no redemption scenario, the illustrative redemption scenario and the maximum redemption scenario.

(7)

See “Unaudited Pro Forma Condensed Combined Financial Information” for pro forma book value in the no redemption scenario and the maximum redemption scenario. Pro forma book value for the illustrative redemption scenario uses the midpoint of the pro forma equity values in the no redemption scenario and the maximum redemption scenario. Euros converted to U.S. dollars at the Balance Sheet Exchange Rate.

(8)

The Equity % with respect to each Additional Dilution Source set forth below, including the Total Additional Dilution Sources, includes the full amount of shares issued with respect to the applicable Additional Dilution Source in the numerator and the full amount of shares issued with respect to the Total Additional Dilution Sources in the denominator. For example, in the Illustrative Redemption Scenario, the Equity % with respect to the Zegna Public Warrants would be calculated as follows: (a) 13,416,667 shares issued pursuant to the Zegna Public Warrants (representing 5.7% of the previously outstanding 236,456,250 shares); divided by (b) (i) 236,456,250 shares (the number of shares outstanding prior to any issuance pursuant to the Zegna Public Warrants) plus (ii) 13,416,667 shares issued pursuant to the Zegna Public Warrants, 6,700,000 shares issued pursuant to the Zegna Private Placement Warrants, 600,000 shares issued pursuant to the Chief Executive Officer’s IPO Performance Bonus and 2,520,000 shares issuable pursuant to the Chief Executive Officer’s LTIP.

(9)

Corresponds to the Chief Executive Officer’s LTIP, under which the Chief Executive Officer is eligible to earn up to 840,000 Ordinary Shares subject to continued service and performance-based conditions for each of 2022 through 2024, for an aggregate of up to 2,520,000 Ordinary Shares.

(10)

The level of redemption also impacts the effective underwriting fee incurred in connection with the IIAC IPO. In a no redemption scenario, based on the approximately $402.5 million in the Trust Account as of September 30, 2021, IIAC’s $14.1 million in deferred underwriting fees represents an effective deferred underwriting fee of approximately 3.5% as a percentage of cash in the Trust Account. In an illustrative redemption scenario, the effective underwriting fee would be approximately 5.1% as a percentage of the amount remaining in the Trust Account following redemptions. In a maximum redemption scenario, the effective underwriting fee would be approximately 9.4% as a percentage of the amount remaining in the Trust Account following redemptions.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. federal income tax consequences of exercising your redemption rights depend on your particular facts and circumstances. See the section entitled “Material Tax Considerations —United States Federal Income Tax Considerations to U.S. Holders—Tax Consequences for U.S. Holders Exercising Redemption Rights.” If you are a U.S. Holder of Class A Shares contemplating exercise of your redemption rights, you are urged to consult your tax advisor to determine the tax consequences thereof.

 

Q:

What are the U.S. federal income tax consequences as a result of the Business Combination?

 

A:

Subject to the limitations and qualifications described in “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders” below, the Business Combination is not expected to be tax-deferred to U.S. Holders (as defined in the section entitled “Material Tax Considerations— United States Federal Income Tax Considerations to U.S. Holders”) of Class A Shares and IIAC Public Warrants for U.S. federal income tax purposes.

The tax consequences of the Business Combination are complex and will depend on your particular circumstances. For a more complete discussion of the U.S. federal income tax considerations of the

 

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Business Combination, see the section entitled “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders—Tax Consequences of the Merger to U.S. Holders.” If you are a U.S. Holder exchanging Class A Shares or IIAC Public Warrants in the Business Combination, you are urged to consult your tax advisor to determine the tax consequences thereof.

 

Q:

If I am an IIAC warrant holder, can I exercise redemption rights with respect to my IIAC Public Warrants?

 

A:

No. The holders of IIAC Public Warrants have no redemption rights with respect to such warrants.

 

Q:

Do I have appraisal rights or dissenters’ rights if I object to the proposed Business Combination?

 

A:

The Cayman Islands Companies Act prescribes when shareholder appraisal rights are available and sets limitations on such rights. Where such rights are available, shareholders are entitled to receive fair value for their shares. However, regardless of whether such rights are or are not available, the IIAC public shareholders are still entitled to exercise the rights of redemption as set out herein, and the IIAC Board has determined that the redemption proceeds payable to shareholders who exercise such redemption rights represent the fair value of those shares.

Section 238. (1) of the Cayman Islands Companies Act provides that a member of a constituent company incorporated thereunder shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation.

Section 239. (1) of the Cayman Islands Companies Act provides that no rights under section 238 of the Cayman Islands Companies Act shall be available in respect of the shares of any class for which an open market exists on a recognised stock exchange or recognised interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5) of the Cayman Islands Companies Act, provided that such section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to section 233 or 237 of the Cayman Islands Companies Act to accept for such shares anything except: (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c).

IIAC shareholders who are considering exercising dissenter’s rights are advised to consult appropriate legal counsel.

 

Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:

If the Business Combination is consummated, the funds held in the Trust Account, along with the proceeds from the Forward Purchase, will be used to: (i) pay IIAC public shareholders who properly exercise their redemption rights; (ii) pay the Cash Consideration to Monterubello; (iii) pay approximately $14.1 million in deferred underwriting commissions to the underwriters of the IIAC IPO; and (iv) pay or cause to be paid certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by IIAC and Zegna in connection with the Business Combination pursuant to the terms of the Business Combination Agreement. Any remaining funds will be used by Zegna for general corporate purposes.

 

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Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

There are a number of Closing conditions in the Business Combination Agreement, including the approval by IIAC shareholders of the Business Combination Proposal and the Merger Proposal and the Aggregate Transaction Proceeds Condition. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.”

 

Q:

What happens if the Business Combination Agreement is terminated or the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Business Combination Agreement may be terminated. Please see the section entitled “The Business Combination Agreement and Ancillary Documents” for information regarding the parties’ specific termination rights.

If IIAC does not consummate the Business Combination, it may continue to try to complete a business combination with a different target business until November 23, 2022. If IIAC fails to complete an initial business combination by November 23, 2022, then IIAC will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Class A Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable, and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Class A Shares, which redemption will completely extinguish IIAC public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of IIAC’s remaining shareholders and the IIAC Board, liquidate and dissolve, subject in each case to IIAC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the IIAC IPO. Please see the section entitled “Risk Factors—Risks Related to the Business Combination and IIAC” for additional information.

Holders of Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, there will be no redemption rights or liquidating distributions with respect to the IIAC Public Warrants and IIAC Private Placement Warrants, which will expire worthless if IIAC fails to complete an initial business combination by November 23, 2022.

 

Q:

When is the Business Combination expected to be completed?

 

A:

The Closing is expected to take place on or prior to the fifth Business Day following the satisfaction or waiver of the conditions described below in the subsection entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.” The closing is expected to occur in the fourth quarter of 2021. The Business Combination Agreement may be terminated by IIAC or Zegna if the Closing has not occurred by April 18, 2022 (unless such date is extended by mutual agreement of IIAC and Zegna).

For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.”

 

Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes hereto, and to consider how the Business Combination will affect you as a

 

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  shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

How do I vote?

 

A:

If you were a holder of record of IIAC Ordinary Shares on November 5, 2021, the record date for the General Meeting, you may vote with respect to the proposals in person or virtually at the General Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the General Meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the General Meeting so that your shares will be voted if you are unable to attend the General Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 5:00 p.m., Eastern Time, on December 14, 2021.

Voting in Person at the Meeting. If you attend the General Meeting and plan to vote in person, you will be provided with a ballot at the General Meeting. If your shares are registered directly in your name, you are considered the shareholder of record and you have the right to vote in person at the General Meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the General Meeting and vote in person, you will need to bring to the General Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. For additional information, please see the section entitled “General Meeting of IIAC Shareholders.”

Voting Electronically. You may attend, vote and examine the list of shareholders entitled to vote at the General Meeting by visiting https://www.cstproxy.com/investindustrial/2021 and entering the control number found on your proxy card, voting instruction form or notice included in the proxy materials.

 

Q:

What will happen if I abstain from voting or fail to vote at the General Meeting?

 

A:

At the General Meeting, a properly executed proxy marked “ABSTAIN” with respect to a particular proposal will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal. However, the NYSE requires that for the Business Combination Proposal, Adjournment Proposal or Merger Proposal to be approved, there must be more votes cast in favor of the proposal than the aggregate of votes against such proposal plus abstentions. Broker non-votes do not count as votes cast. Therefore, in order to maintain compliance with this NYSE requirement, abstentions will count as a vote “AGAINST” each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by IIAC without an indication of how the shareholder intends to vote on a proposal will be voted “FOR” each proposal presented to the shareholders. The proxyholders may use their discretion to vote on any other matters which properly come before the General Meeting.

 

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Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. IIAC believes that all of the proposals presented to the shareholders at this General Meeting will be considered non-routine and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the General Meeting. If you do not provide instructions with your proxy card, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares. This indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the General Meeting. Your broker, bank or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to IIAC’s Secretary at the following address: Investindustrial Acquisition Corp., Suite 1, 3rd Floor, 11-12 St James’s Square, London, United Kingdom, so that it is received by IIAC’s Secretary prior to the General Meeting or attend the General Meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to IIAC’s Secretary, which must be received by IIAC’s Secretary prior to the General Meeting.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the General Meeting?

 

A:

IIAC will pay the cost of soliciting proxies for the General Meeting. IIAC has engaged Morrow to assist in the solicitation of proxies for the General Meeting. IIAC has agreed to pay Morrow a fee of $37,500, plus disbursements, and will reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. IIAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of IIAC Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of IIAC Ordinary Shares and in obtaining voting instructions from those owners. The directors, officers and employees of IIAC may also solicit proxies by telephone, by facsimile, by mail, on the Internet, in person or virtually. They will not be paid any additional amounts for soliciting proxies.

 

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Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact IIAC’s proxy solicitor:

Morrow Sodali LLC

470 West Avenue

Stamford, CT 06902

Individuals call toll-free: (800) 662-5200

Banks and brokers call: (203) 658-9400

Email: IIAC.info@investor.morrowsodali.com

To obtain timely delivery, IIAC shareholders must request the materials no later than December 8, 2021, or five business days prior to the General Meeting.

You may also obtain additional information about IIAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your Class A Shares (either physically or electronically) to the Transfer Agent prior to the General Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your public shares, please contact the Transfer Agent:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, NY 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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SUMMARY

This summary highlights selected information contained in this proxy statement/prospectus and does not contain all of the information that may be important to you. You should read carefully and in their entirety this proxy statement/prospectus, including the Annexes and accompanying financial statements of IIAC and Zegna, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the General Meeting (as described below). Please see the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

Zegna

Zegna is a joint stock company incorporated under Italian law (which will be converted into a Dutch public limited liability company (naamloze vennootschap) to be renamed Ermenegildo Zegna N.V. upon the Conversion).

Zegna is a leading global luxury group, internationally recognized for the distinctive heritage of craftsmanship, quality and design associated with its Zegna and Thom Browne brands and the noble fabrics and fibers of its in-house luxury textile and knitwear business. Since its foundation in 1910, Zegna has expanded beyond the luxury textile production to ready-to-wear products and accessories to become a highly recognized luxury lifestyle group. Zegna designs, manufactures, markets and distributes luxury menswear, footwear, leather goods and other accessories under the Zegna and the Thom Browne brands, and luxury womenswear and childrenswear under the Thom Browne brand. Zegna’s product range is complemented by eyewear, cufflinks and jewelry, watches, underwear and beachwear manufactured by third parties under licenses. Zegna’s business covers the entire value chain as a result of its design, manufacturing and distribution business. Zegna’s goal is to provide customers with excellent products that reflect its tradition of fine craftsmanship with exclusive design content and with a style that preserves the exceptional manufacturing quality Zegna is known for, through the sourcing of superior raw materials, the careful finish of each piece, and the way they are delivered to customers. In 2020, 2019 and 2018, Zegna recorded revenues of €1,014,733 thousand, €1,321,327 thousand and €1,182,563 thousand, respectively, (Loss)/profit for the year of (€46,540) thousand, €25,439 thousand, and €40,514 thousand, respectively and Adjusted EBIT of €20,013 thousand, €107,274 thousand and €105,268 thousand, respectively. In the six months ended June 30, 2021 and 2020, Zegna recorded revenues of €603,340 thousand and €402,386 thousand, respectively, Profit/(loss) for the period of €32,234 thousand and (€87,755) thousand, respectively and Adjusted EBIT of €66,813 thousand and (€51,981) thousand, respectively. For additional information regarding Adjusted EBIT, which is a non-IFRS measure, including a reconciliation of Adjusted EBIT to profit/(loss), see “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-IFRS Financial Measures—Adjusted EBIT”.

The mailing address of Zegna’s principal executive office is Viale Roma 99/100, 13835 Valdilana loc. Trivero, Italy and its telephone number is +39 01575911. Its agent for U.S. federal securities law purposes is Vincenzo Roberto, c/o Ermenegildo Zegna Corporation, 7th Floor, 10 East 53rd Street, New York, NY, 10022. Zegna also maintains a website at www.zegnagroup.com.

IIAC

IIAC is a blank check company, which was incorporated as a Cayman Islands exempted company on September 7, 2020. It was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

The registration statement for the IIAC IPO was declared effective on November 18, 2020. On November 23, 2020, IIAC consummated the initial public offering of 35,000,000 units at an offering price of

 

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$10.00 per unit, generating gross proceeds of $350.0 million, and incurring approximately $12.3 million in deferred underwriting commissions. Simultaneously with the closing of the initial public offering, IIAC completed a private placement of 6,000,000 IIAC Private Placement Warrants at a price of $1.50 per IIAC Private Placement Warrant to IIAC Sponsor, generating proceeds of $9.0 million.

On November 24, 2020, the Underwriters fully exercised the over-allotment option to purchase an additional 5,250,000 units. On November 27, 2020, IIAC completed the sale of the Over-Allotment Units to Underwriters, generating gross proceeds of $52.5 million, and incurred additional deferred underwriting commissions of $1.8 million. IIAC also incurred additional offering costs of approximately $9.2 million associated with the initial public offering and the completion of the sale of the Over-Allotment Units to Underwriters. Simultaneously with the closing of the Over-Allotment, on November 27, 2020, IIAC consummated a second private placement, resulting in the purchase of an additional 700,000 IIAC Private Placement Warrants by IIAC Sponsor, generating gross proceeds of approximately $1.1 million.

Upon the closing of the IIAC IPO (including the exercise of the over-allotment options) and the private placements, an aggregate of $402.5 million was deposited in the Trust Account and is invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in money market fund meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by IIAC, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account.

The Class A Shares, IIAC Public Units and IIAC Public Warrants are currently listed on the NYSE under the symbols “IIAC,” “IIAC.U” and “IIAC WS,” respectively.

Zegna Merger Sub

EZ Cayman is a Cayman Islands exempted company wholly-owned by Zegna that was incorporated on July 13, 2021 to facilitate the consummation of the Business Combination. In connection with the Business Combination, Zegna Merger Sub will merge with and into IIAC, with IIAC continuing as the surviving entity.

The registered address of Zegna Merger Sub is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands.

The Business Combination

On July 18, 2021, IIAC, Zegna and Zegna Merger Sub entered into the Business Combination Agreement, which provides for, among other things, the following transactions:

 

   

on the Closing Date prior to the Effective Time, Zegna will undertake the Conversion;

 

   

following the Conversion on the Closing Date, the FPA Purchaser will purchase from IIAC 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate), subject to adjustment in accordance with the terms of the Forward Purchase Agreement;

 

   

immediately following the consummation of the Forward Purchase, at the Effective Time, Zegna Merger Sub will merge with and into IIAC, with IIAC as the surviving company in the Merger and becoming a wholly owned subsidiary of Zegna;

 

   

in connection with the Merger, (i) each share in the capital of Zegna Merger Sub issued and outstanding immediately prior to the Effective Time will be automatically cancelled and converted into one ordinary share in the share capital of the Surviving Company, (ii) each IIAC Ordinary Share issued and outstanding immediately prior to the Effective Time will remain outstanding as one ordinary share of the Surviving Company for further contribution as a contribution in kind,

 

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immediately following the Effective Time, to Zegna in consideration for one ordinary share in the share capital of Zegna, (iii) each IIAC Ordinary Share held immediately prior to the Effective Time by IIAC as treasury shares will be cancelled, and no consideration will be paid with respect thereto, (iv) each outstanding IIAC Public Warrant will automatically cease to represent a right to acquire one Class A Share and will automatically be converted to and represent, at the Effective Time, a right to acquire one Ordinary Share on the same contractual terms and conditions as were in effect immediately prior to the Effective Time under the terms of the Warrant Agreement and (v) each IIAC Private Placement Warrant that is outstanding immediately prior to the Effective Time will be exchanged, at the Effective Time, for the issuance by Zegna of a Zegna Private Placement Warrant representing a right to acquire one Ordinary Share on the same contractual terms and conditions as those of the IIAC Private Placement Warrants as were in effect immediately prior to the Warrant Agreement Amendment;

 

   

immediately following the Effective Time, Zegna will consummate the PIPE Financing;

 

   

promptly following the consummation of the PIPE Financing, the Surviving Company will distribute an amount of cash equal to the Capital Distribution Amount to Zegna by way of the Capital Distribution; and

 

   

promptly following the Capital Distribution, Zegna will acquire 54,600,000 Ordinary Shares from Monterubello in exchange for €455,000,000.

For more information about the Business Combination, please see the sections entitled “The Business Combination” and “The Business Combination Agreement and Ancillary Documents.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

Conditions to Closing of the Business Combination

The respective obligations of each party to the Business Combination Agreement to consummate the Business Combination, are subject to the satisfaction, or written waiver by the party having the right thereto, at or prior to the Closing of the following conditions:

 

   

no order or law enjoining or prohibiting the consummation of the Conversion, the Forward Purchase, the Merger, the PIPE Financing, the Capital Distribution or the Share Repurchase;

 

   

the effectiveness of this proxy statement/prospectus;

 

   

approval of the Business Combination and the transactions contemplated thereby by the IIAC Shareholders and the Zegna shareholders;

 

   

the approval from the NYSE for listing of the Ordinary Shares;

 

   

IIAC having at least $5,000,001 of net tangible assets after giving effect to the Conversion, the Forward Purchase and the Merger and prior to the PIPE Financing, Capital Distribution and Share Repurchase;

 

   

the absence of a Zegna Material Adverse Effect (which condition may be waived only by IIAC);

 

   

the Aggregate Transaction Proceeds being equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000 (which condition may be waived only by Zegna); and

 

   

delivery of relevant Closing documents to implement the Business Combinations.

The obligations of the parties to the Business Combination Agreement to consummate the Business Combination are subject to additional conditions, as described more fully in the section entitled “The Business Combination Agreement and Ancillary Documents—Conditions to Closing of the Business Combination.

 

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Effect of the Business Combination on Existing IIAC Equity

Subject to the terms and conditions of the Business Combination Agreement, the Business Combination will result in, among other things, the following:

 

   

each Class A Share will be exchanged into one fully paid and non-assessable Ordinary Share;

 

   

each Founder Share will be exchanged into one fully paid and non-assessable Ordinary Share;

 

   

each IIAC Public Warrant will be exchanged into a Zegna Public Warrant, on the same terms and conditions as those applicable to the IIAC Public Warrants; and

 

   

each IIAC Private Placement Warrant will be exchanged into a Zegna Private Placement Warrant, on the same terms and conditions as those applicable to the IIAC Private Placement Warrants.

Ancillary Documents

This section describes certain additional agreements entered into or to be entered into in connection with the Business Combination. For additional information, see “The Business Combination Agreement and Ancillary Documents—Ancillary Documents.”

Subscription Agreements

Concurrently with the execution of the Business Combination Agreement, IIAC and Zegna entered into the PIPE Subscription Agreements with certain investors. Pursuant to the PIPE Subscription Agreements, certain investors agreed to subscribe for, and Zegna agreed to issue to such PIPE Investors, including certain inside subscribers (including the FPA Purchaser, Sergio P. Ermotti, currently the chairman of the IIAC Board and Ermenegildo Zegna di Monte Rubello) an aggregate amount of 25,000,000 Ordinary Shares for a purchase price of $10.00 per share, for aggregate gross proceeds of $250,000,000. The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Ordinary Shares to be issued pursuant to the PIPE Subscription Agreements have not been registered under the Securities Act, and will be issued in reliance on the availability of an exemption from such registration. The PIPE Subscription Agreements provide for certain customary registration rights. For additional information, see “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Subscription Agreements.”

Registration Rights Agreement

Concurrently with the Closing, Zegna, the Zegna Shareholders, the IIAC Sponsor, the FPA Purchaser and the Other Class B Shareholders (collectively, the “Holders”) will enter into the Registration Rights Agreement, pursuant to which, among other things, the Holders will be granted certain registration rights with respect to certain Ordinary Shares and other equity securities of Zegna held by the Holders from time to time. The Registration Rights Agreement will also provide customary “piggyback” registration rights, subject to certain requirements and customary cut-backs. For additional information, see “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Registration Rights Agreement.”

Lock-Up Agreements

Concurrently with the Closing, the Zegna Shareholders, the IIAC Sponsor, the FPA Purchaser and the Other Class B Shareholders will enter into the Lock-Up Agreements with Zegna. For additional information, see “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Lock-Up Agreements.”

Sponsor Letter Agreement

Concurrently with the execution of the Business Combination Agreement, IIAC, the IIAC Sponsor, each Other Class B Shareholder and Zegna entered into the Sponsor Letter Agreement, pursuant to which the

 

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IIAC Sponsor and the Other Class B Shareholders agreed to, among other things, (i) vote all of their IIAC Ordinary Shares held of record or thereafter acquired in favor of each of the transaction proposals to be voted upon at the meeting of IIAC shareholders, including approval of the Business Combination Agreement and the transactions contemplated thereby, (ii) waive any adjustment to the conversion ratio set forth in the governing documents of IIAC or any other anti-dilution or similar protection with respect to the Class B Shares (whether resulting from the transactions contemplated by the PIPE Subscription Agreements or otherwise), (iii) waive their respective redemption rights in connection with the consummation of the Business Combination with respect to any Class A Shares in IIAC held by them, (iv) be bound by certain other covenants and agreements related to the Business Combination, including exclusivity and confidentiality restrictions, and (v) be bound by certain transfer restrictions with respect to their IIAC Ordinary Shares prior to the Closing, in each case on the terms and subject to the conditions set forth in the Sponsor Letter Agreement.

Company Support Agreement

Concurrently with the execution of the Business Combination Agreement, the Zegna Existing Shareholders entered into the Company Support Agreement with IIAC and Zegna, pursuant to which the Zegna Existing Shareholders have agreed to, among other things, (i) vote all of their ordinary shares of Zegna held of record or thereafter acquired in favor of the Business Combination Agreement and the transactions contemplated thereby, (ii) be bound by certain other covenants and agreements related to the Business Combination, including exclusivity and confidentiality restrictions and (iii) be bound by certain transfer restrictions with respect to their ordinary shares of Zegna, in each case on the terms and subject to the conditions set forth in the Company Support Agreement.

Shareholders Agreement

Concurrently with the Closing, Zegna, the Zegna Existing Shareholders and the IIAC Sponsor will enter the Shareholders Agreement, pursuant to which, among other things, for so long as the Sponsor Group satisfies the Minimum Holding Requirement and subject to the terms and conditions of such agreement: (i) the parties thereto will, and will cause their respective controlled affiliates to, exercise their rights and powers such that the Sponsor Nominee will only be suspended or dismissed if so requested in writing by the IIAC Sponsor, (ii) Zegna will offer the Sponsor Nominee the opportunity to be proposed to the Zegna Board for appointment to serve on the Audit Committee and/or the Compensation Committee, (iii) the IIAC Sponsor will have the right to participate in certain capital raises of Zegna, (iv) Zegna will consult with the IIAC Sponsor and solicit and consider its views in good faith before taking certain enumerated actions, and (v) Zegna will provide certain access rights to senior representatives of the IIAC Sponsor to interact periodically with its Chief Executive Officer, Chief Financial Officer and Chief Operating Officer. For additional information, see “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Shareholders Agreement.”

Warrant Agreement Amendment, Warrant Assumption and Amendment Agreement and New Warrant Agreement

Effective immediately prior to the Effective Time, IIAC will enter into the Warrant Agreement Amendment, pursuant to which the warrant exercise price of the IIAC Private Placement Warrants will be amended to $0.01 and the duration of the exercise period of the IIAC Private Placement Warrants will be extended by amendment so that the IIAC Private Placement Warrants will be exercisable by Zegna in connection with the Closing. Concurrently with the Closing, Zegna will enter into (i) the Warrant Assumption and Amendment Agreement, pursuant to which, among other things, effective as of the Effective Time Zegna will assume all applicable obligations of IIAC in respect of the IIAC Public Warrants under the Warrant Agreement and (ii) a new warrant agreement governing the Zegna Private Placement Warrants, on the same terms and conditions as the IIAC Private Placement Warrants as were in effect immediately prior to the Warrant Agreement Amendment (the “New Warrant Agreement”). For additional information, see “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Warrant Agreement Amendment, Warrant Assumption and Amendment Agreement and New Warrant Agreement.

 

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IIAC Board’s Reasons for Approval of the Business Combination

In evaluating the transaction with Zegna, the IIAC Board consulted with IIAC’s management and legal counsel as well as financial and other advisors, and the IIAC Board considered and evaluated several factors. The IIAC Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination. For a description of such factors, see “The Business Combination Agreement—IIAC Board’s Reasons for Approval of the Business Combination.

The factors considered by the IIAC Board included:

 

   

Zegna’s growth prospects and position within the attractive luxury retail industry.

 

   

Zegna’s strong and established presence across the globe and in particular its position within the attractive Asia Pacific market.

 

   

Zegna’s vertically integrated supply chain and strong supplier relationships that allow Zegna to focus on high-end fabrics and effective and flexible production.

 

   

The strength of the Zegna and Thom Browne brands and their deep, loyal customer base.

 

   

Zegna’s commitment to sustainability in the management of its business.

 

   

The application of the proceeds of the Business Combination to fund Zegna’s organic and non-organic growth opportunities and accelerate value creation.

 

   

The detailed due diligence conducted by IIAC’s management team and its advisors.

 

   

Zegna’s historical financial results and outlook, as well as the financial profiles of publicly traded companies in the luxury retail industry.

 

   

The opinion of Mediobanca, that the transaction consideration to be received by the holders of the IIAC Ordinary Shares in the Business Combination is fair to such holders from a financial point of view.

 

   

The consideration to be received by IIAC shareholders and the opportunity for a meaningful interest in Zegna and participation in the future success of Zegna.

 

   

The strength of the Zegna management team, led by Mr. Zegna, and the stability and continuity in advancing Zegna’s strategic and growth goals.

 

   

The agreement of Zegna equityholders to a lock-up in respect of their Ordinary Shares of up to 18 months.

 

   

The agreement of the PIPE Investors to invest $250 million in Zegna at the Closing.

 

   

The Zegna equityholders’ support of the Business Combination demonstrated by their delivery of a Company Support Agreement.

 

   

The participation of the IIAC Sponsor in the post-Closing corporate governance of Zegna.

 

   

The terms of the Business Combination Agreement which were the product of arm’s length negotiations between IIAC and Zegna.

The IIAC Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

   

The risk that the future financial performance of Zegna may not meet expectations.

 

   

The risk that a significant portion of the IIAC Ordinary Shares are redeemed in connection with the consummation of the Business Combination.

 

   

The potential risks to IIAC if the Business Combination is not completed.

 

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An exclusivity provision that prohibits IIAC from soliciting other business combination proposals.

 

   

The risk that IIAC’s shareholders may not approve the Business Combination.

 

   

The other conditions to completion of the Business Combination, certain of which are not within IIAC’s control.

 

   

The challenges associated with preparing Zegna, a privately held entity, to become a publicly traded company on the NYSE.

 

   

The possibility of litigation challenging the Business Combination or an adverse judgment.

 

   

The risk that Zegna could be subject to a material data breach.

 

   

The fees and expenses associated with the Business Combination, some of which would be payable regardless of whether the Business Combination is ultimately consummated.

 

   

The limited influence that current IIAC shareholders may have in Zegna due to their minority ownership position.

The IIAC Board also considered that certain of the officers and directors of IIAC may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of IIAC’s shareholders (see “—Interests of Certain Persons in the Business Combination” below). IIAC’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and approving, as members of the IIAC Board, the Business Combination Agreement and the transactions contemplated therein, including the Business Combination.

The IIAC Board concluded that the potential benefits that it expected IIAC and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the IIAC Board determined that the Business Combination Agreement, the Business Combination and the Plan of Merger, were advisable, fair to, and in the best interests of, IIAC and its shareholders.

For more information about the IIAC Board’s decision-making process concerning the Business Combination, please see the section entitled “The Business Combination—IIAC Board’s Reasons for Approval of the Business Combination.

The General Meeting of IIAC Shareholders

Date, Time and Place of General Meeting

The General Meeting of IIAC shareholders will be held on December 15, 2021 at 9:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

Due to the current novel coronavirus (“COVID-19”) global pandemic, there are restrictions in place in many jurisdictions relating to the ability to conduct in-person meetings. As part of our precautions regarding COVID-19, we are planning for the meeting to be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association.

Proposals

At the General Meeting, IIAC shareholders will be asked to consider and vote on:

 

   

Business Combination Proposal — to consider and vote upon a proposal by ordinary resolution that the Business Combination Agreement and the consummation of the transactions contemplated thereby be authorized, approved and confirmed in all respects (Proposal No. 1);

 

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Merger Proposal — to consider and vote upon a proposal by special resolution that the Plan of Merger in the form tabled to the General Meeting pursuant to which Zegna Merger Sub will merge with and into IIAC so that IIAC will be the surviving company and all the rights and obligations of Zegna Merger Sub will be assumed by IIAC by virtue of such Merger pursuant to the Cayman Islands Companies Act, and the consummation of the Merger and the remaining transactions contemplated thereby, be authorized, approved and confirmed in all respects; and IIAC be authorized to enter into the Plan of Merger (Proposal No. 2); and

 

   

Adjournment Proposal — to consider and vote upon a proposal by ordinary resolution to adjourn the General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the General Meeting, (B) if as of the time for which the General Meeting is scheduled, there are insufficient IIAC Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the General Meeting, or (D) if IIAC shareholders redeem an amount of Class A Shares such that the Aggregate Transaction Proceeds Condition is not satisfied (Proposal No. 3).

Please see the sections entitled “Proposal No. 1—The Business Combination Proposal,” “Proposal No. 2—The Merger Proposal” and “Proposal No. 3—The Adjournment Proposal.

Voting Power; Record Date

As a shareholder of IIAC, you have a right to vote on certain matters affecting IIAC. The proposals that will be presented at the General Meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement/prospectus. If you are a shareholder you will be entitled to vote or direct votes to be cast at the General Meeting if you owned IIAC Ordinary Shares at the close of business on November 5, 2021, which is the record date for the General Meeting. You are entitled to one vote for each IIAC Ordinary Share that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 50,312,500 IIAC Ordinary Shares outstanding, of which 40,250,000 are public shares and 10,062,500 are Founder Shares held by the IIAC Initial Shareholders.

Vote of the IIAC Initial Shareholders and IIAC’s Other Directors and Officers

Prior to the IIAC IPO, IIAC entered into a letter agreement with the IIAC Initial Shareholders and the other current directors and officers of IIAC, pursuant to which each agreed to vote any IIAC Ordinary Shares owned by them in favor of an initial business combination. This agreement applies to the IIAC Initial Shareholders, including IIAC Sponsor, as it relates to the Founder Shares and the requirement to vote all of the Founder Shares in favor of the Business Combination Proposal and for all other proposals presented to IIAC shareholders in this proxy statement/prospectus. The IIAC Initial Shareholders further entered into the Sponsor Letter Agreement with IIAC and Zegna with respect to the Business Combination, whereby the IIAC Initial Shareholders agreed to vote any IIAC Ordinary Shares owned by them in favor of the Business Combination. As of the record date, the IIAC Initial Shareholders own 10,062,500 Founder Shares, representing 20% of the IIAC Ordinary Shares then outstanding and entitled to vote at the General Meeting.

The IIAC Initial Shareholders and the other current directors and officers of IIAC have, for no additional consideration, waived any redemption rights, including with respect to Class A Shares purchased in

 

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the IIAC IPO or in the aftermarket, in connection with the Business Combination. The Founder Shares held by the IIAC Initial Shareholders have no redemption rights upon the liquidation of IIAC and will be worthless if no business combination is effected by IIAC by November 23, 2022. However, the IIAC Sponsor and the current directors and officers are entitled to redemption rights upon the liquidation of IIAC with respect to any Class A Shares they may own.

Quorum and Required Vote for Proposals at the General Meeting

One or more shareholders who together hold a majority of the issued and outstanding IIAC Ordinary Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. Broker non-votes will not be counted as present for the purpose of determining a quorum. Abstentions will be considered present for the purposes of establishing a quorum. The IIAC Initial Shareholders, who own 20% of the issued and outstanding IIAC Ordinary Shares as of the record date, will count towards this quorum. As a result, as of the record date, in addition to the shares of the IIAC Initial Shareholders, an additional 15,093,751 IIAC Ordinary Shares held by public shareholders would be required to achieve a quorum. In the absence of a quorum, the chairman of the General Meeting has power to adjourn the General Meeting.

The approval of each of the Business Combination Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a two-thirds majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. Accordingly, an IIAC shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of IIAC Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal, Adjournment Proposal or Merger Proposal. Broker non-votes will not be counted in connection with the determination of whether a valid quorum is established, and will have no effect on the Business Combination Proposal, Adjournment Proposal or Merger Proposal. Abstentions will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal. However, the NYSE requires that for the Business Combination Proposal, Adjournment Proposal or Merger Proposal to be approved, there must be more votes cast in favor of the proposal than the aggregate of votes against such proposal plus abstentions. Broker non-votes do not count as votes cast. Therefore, in order to maintain compliance with this NYSE requirement, abstentions will count as a vote “AGAINST” each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal.

The Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Business Combination Proposal and the Merger Proposal are conditioned upon the approval of each other. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal or the Merger Proposal does not receive the requisite vote for approval, then IIAC will not consummate the Business Combination. If IIAC does not consummate the Business Combination and fails to complete an initial business combination by November 23, 2022, IIAC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the public shareholders.

 

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Recommendation to IIAC Shareholders

The IIAC Board believes that each of the Business Combination Proposal, Merger Proposal and Adjournment Proposal to be presented at the General Meeting is in the best interests of IIAC and its shareholders and unanimously recommends that its shareholders vote “FOR” each of the proposals.

Interests of Certain Persons in the Business Combination

In considering the recommendation of the IIAC Board to vote in favor of approval of the Business Combination Proposal and the Merger Proposal, IIAC shareholders should be aware that aside from their interests as shareholders, the IIAC Sponsor and IIAC’s other current officers and directors have interests in the Business Combination and the Merger that are different from, or in addition to, those of other IIAC shareholders generally. The IIAC Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and the Merger, and in recommending to IIAC shareholders that they approve the Business Combination Proposal and the Merger Proposal. IIAC shareholders should take these interests into account in deciding whether to approve the Business Combination Proposal and the Merger Proposal.

These interests include, among other things, the interests listed below:

 

   

the fact that the IIAC Sponsor and IIAC’s directors have agreed not to redeem any Class A Shares held by them in connection with a shareholder vote to approve a proposed initial business combination, including the Business Combination;

 

   

the fact that the IIAC Sponsor paid an aggregate of $25,000 for the 10,062,500 Founder Shares currently owned by the IIAC Sponsor and the Other Class B Shareholders and such securities will have a significantly higher value upon the consummation of the Business Combination;

 

   

the fact that 50% of the Ordinary Shares into which the Founder Shares will be exchanged will be held in escrow and will be released to the IIAC Initial Shareholders, pro rata, upon satisfaction of certain share price triggers. During the period that such Ordinary Shares are held in escrow, the IIAC Initial Shareholders will not be entitled to vote or receive dividends thereon;

 

   

the fact that the IIAC Sponsor paid an aggregate of $10,050,000 for 6,700,000 warrants, each exercisable to purchase one Class A Share at $11.50 per share, subject to adjustment, and such warrants will expire as worthless if an initial business combination is not consummated by November 23, 2022;

 

   

the fact that Sponsor Group paid an aggregate of $235,575,000 for its investment in Zegna (including the FPA Purchaser’s investment in the PIPE Financing and the Forward Purchase), as summarized in the table below, and, following the consummation of the Business Combination, the aggregate value of the IIAC Sponsor’s investment will be $292,303,275 (excluding the Escrowed Shares), based upon the respective closing prices of the Class A Shares and the IIAC Public Warrants on the NYSE on October 28, 2021.

Sponsor Group Ownership of IIAC Prior to Closing

 

     Securities held by Sponsor Group      Sponsor Cost at IIAC’s
initial public offering ($)
 

Class A Shares

             

Founder Shares

     9,937,500      $ 25,000  

IIAC Private Placement Warrants

     6,700,000      $ 10,050,000  
     

 

 

 

Total

      $ 10,075,000  
     

 

 

 

 

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Sponsor Group Ownership of Zegna Following the Closing

 

     Securities held by
Sponsor Group Prior
to Closing
    Value per
Security ($)
     Sponsor Group
Cost at Closing ($)
    Total Value ($)  

Ordinary Shares Issued Pursuant to the PIPE Financing

     620,000     $ 10.02      $ 6,200,000     $ 6,212,400  

Ordinary Shares Issued Pursuant to the Forward Purchase

     22,500,000     $ 10.02      $ 219,300,000 (1)    $ 225,450,000  

Ordinary Shares Issued to Holders of Founder Shares

     4,968,750 (2)    $ 10.02            $ 49,786,875  

Zegna Private Placement Warrants

     6,700,000     $ 1.62            $ 10,854,000  
       

 

 

   

 

 

 

Total

        $ 225,500,000     $ 292,303,275  
       

 

 

   

 

 

 

 

(1)

Under the Forward Purchase Agreement, the FPA Purchaser will purchase 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000, subject to adjustment in accordance with the terms of the Forward Purchase Agreement. The dollar amount listed in the chart is an approximate amount for illustrative purposes only and is based on the Balance Sheet Exchange Rate.

(2)

Excludes 4,968,750 Escrowed Shares which will be held in escrow until the satisfaction of the relevant release conditions or lapse of the prescribed period of time. As long as any such Escrowed Shares are held in escrow, the IIAC Sponsor’s voting and economic rights shall be restricted.

 

   

the fact that IIAC Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on IIAC’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. IIAC’s audit committee reviews on a quarterly basis all payments that were made to IIAC Sponsor, IIAC’s executive officers or directors, or IIAC’s or their affiliates. Any such payments prior to an initial business combination are made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, IIAC does not have any additional controls in place governing IIAC’s reimbursement payments to IIAC’s directors and executive officers for their out-of-pocket expenses incurred in connection with IIAC’s activities on IIAC’s behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, is paid by IIAC to IIAC Sponsor, IIAC’s executive officers and directors, or any of their respective affiliates, prior to completion of its initial business combination. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by IIAC’s executive officers and directors and there are no outstanding out-of-pocket expenses for which IIAC’s executive officers or directors are awaiting reimbursement;

 

   

the fact that the IIAC Sponsor, the Other Class B Shareholders and IIAC’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if IIAC fails to complete an initial business combination by November 23, 2022;

 

   

the fact that the Shareholders Agreement will be entered into by, among others, the IIAC Sponsor, and the Registration Rights Agreement will be entered into by, among others, the IIAC Sponsor and the Other Class B Shareholders;

 

   

the fact that, pursuant to the Business Combination Agreement, the IIAC Sponsor will have certain governance rights in respect of Zegna that will be set forth in Zegna’s governing documents and in the Shareholders Agreement, as described in “Description of Zegna Securities—Board of Directors—Nomination and Appointment” and “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Shareholders Agreement.”

 

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the fact that the Business Combination Agreement provides that Andrea C. Bonomi, who is currently a member of IIAC’s advisory board, will be appointed as a member of the Zegna Board following the Closing. Mr. Bonomi is also Chairman of the Industrial Advisory Board of Investindustrial, and has or may have in the future direct or indirect investments and interests in the performance of Zegna, Investindustrial or their respective affiliates;

 

   

the fact that the Business Combination Agreement provides that Sergio P. Ermotti, who is currently an independent director and the chairman of the IIAC Board, owns 75,000 Class B Shares and has an ownership interest in the IIAC Sponsor (through which he has indirect ownership of additional Class B Shares and IIAC Private Placement Warrants to purchase Class A Shares), will be appointed as a member of the Zegna Board following the Closing and, in connection with the Closing, will receive a one-time grant of 100,000 Zegna Private Placement Warrants, subject to corporate approvals;

 

   

the right of the IIAC Sponsor and the Other Class B Shareholders to hold Ordinary Shares following the Business Combination, subject to the terms and conditions of the IIAC Sponsor Lock-Up Agreement;

 

   

the fact that the Business Combination Agreement provides for the continued indemnification of IIAC’s existing directors and officers and the members of IIAC’s advisory board and requires Zegna to purchase, at or prior to Closing, and maintain in effect for a period of six (6) years after the Closing Date, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain IIAC’s directors and officers after the Business Combination;

 

   

the fact that the IIAC 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;

 

   

the IIAC Sponsor and its affiliates can earn a positive rate of return on their investment, even if other IIAC shareholders experience a negative rate of return in the post-business combination company;

 

   

the fact that the FPA Purchaser, an affiliate of the IIAC Sponsor, has entered into the Forward Purchase Agreement with IIAC and committed to purchase from IIAC up to 25,000,000 Class A Shares on the terms specified therein in connection with the Business Combination, which Forward Purchase Agreement was amended in connection with the Business Combination Agreement such that the FPA Purchaser committed to purchase from IIAC 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate), subject to adjustment in accordance with the terms of the Forward Purchase Agreement;

 

   

the fact that, in connection with the PIPE Financing, the FPA Purchaser and Sergio P. Ermotti, the chairman of the IIAC Board, will subscribe for 620,000 and 120,000 Ordinary Shares, respectively;

 

   

the fact that the IIAC Sponsor and IIAC’s officers and directors will lose their investment in IIAC and will not be reimbursed for any out-of-pocket expenses incurred by them on IIAC’s behalf incident to identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by November 23, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event IIAC is unable to complete an initial business combination within the required time period, the IIAC Sponsor has agreed to indemnify IIAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which IIAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to IIAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; and

 

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the fact that, at the option of the IIAC Sponsor, any amounts outstanding under any loan made by the IIAC Sponsor or any of its Affiliates to IIAC in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A Shares in connection with the consummation of the Business Combination (provided that, pursuant to the Sponsor Letter Agreement, the IIAC Sponsor has agreed not to convert such loans into warrants without the consent of Zegna), and such amounts (including amounts due under the outstanding promissory notes) will likely be written off if an initial business combination is not consummated by November 23, 2022.

In addition, certain persons who are expected to become Zegna Directors after the completion of the Business Combination may have interests in the Business Combination that are different from, or in addition to, the interests of the IIAC shareholders. See “The Business Combination—Interests of Certain Persons in the Business Combination” for additional information.

Redemption Rights

Pursuant to IIAC’s amended and restated memorandum and articles of association, holders of Class A Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with IIAC’s amended and restated memorandum and articles of association. As of September 30, 2021, this would have amounted to approximately $10.00 per share. If a holder of Class A Shares exercises his, her or its redemption rights, then such holder will be exchanging his, her or its Class A Shares for cash and will not own shares of Zegna following the Closing. Such a holder will be entitled to receive cash for his, her or its public shares only if he, she or it properly demands redemption and delivers his, her or its shares (either physically or electronically) to the Transfer Agent in accordance with the procedures described herein. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his, her or it or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the Class A Shares included in the IIAC Public Units sold in the IIAC IPO, without IIAC’s prior consent. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed without IIAC’s consent.

IIAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of Class A Shares by IIAC public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $402.5 million as of September 30, 2021. The Business Combination Agreement provides that Zegna’s obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the Aggregate PIPE Proceeds and the proceeds from the Forward Purchase Agreement being equal to or greater than the sum of (i) €184,500,000 plus (ii) $400,000,000. The conditions to Closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by IIAC’s public shareholders, the Aggregate Transaction Proceeds Condition is not met or is not waived, then Zegna may elect not to consummate the Business Combination. In addition, in no event will IIAC redeem its Class A Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in the IIAC amended and restated memorandum and articles of association and as required as a Closing condition to each party’s obligation to consummate the Business Combination under the terms of the Business Combination Agreement. IIAC shareholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “General Meeting of IIAC Shareholders—Redemption Rights” in order to properly redeem their public shares.

The IIAC Initial Shareholders and the other current directors and officers of IIAC have waived any redemption rights, including with respect to Class A Shares purchased in the IIAC IPO or in the aftermarket, in connection with Business Combination. The Founder Shares held by the IIAC Initial Shareholders have no redemption rights upon the liquidation of IIAC and will be worthless if no business combination is effected by IIAC

 

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by November 23, 2022. However, the IIAC Initial Shareholders and the other current directors and officers of IIAC are entitled to redemption rights upon the liquidation of IIAC with respect to any public shares they may own.

Holders of IIAC Public Warrants will not have redemption rights with respect to such warrants.

Certain Information Relating to Zegna

Listing of Ordinary Shares and Zegna Public Warrants on NYSE

Zegna is currently a privately held company and its shares are not currently traded on a stock exchange. Zegna intends to apply to list the Ordinary Shares and the Zegna Public Warrants on NYSE under the symbols “ZGN” and “ZGN WS,” respectively, upon the Closing. We cannot assure you that the Ordinary Shares and the Zegna Public Warrants will be approved for listing on NYSE.

Delisting of IIAC Securities and Deregistration of IIAC

IIAC and Zegna anticipate that, following consummation of the Business Combination, the Class A Shares, IIAC Public Units and IIAC Public Warrants will be delisted from NYSE, and IIAC will terminate its registration under the Exchange Act.

Foreign Private Issuer

As a “foreign private issuer,” Zegna will be subject to different U.S. securities laws than domestic U.S. issuers. As a “foreign private issuer” Zegna will be exempt from rules under the Exchange Act, that impose certain disclosure and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, its officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of the Ordinary Shares. Moreover, Zegna will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, nor be required to comply with Regulation FD, which restricts the selective disclosure of material information.

Material Tax Consequences

As further described in “Material Tax Considerations—Material U.S. Federal Income Tax Considerations to U.S. Holders,” it is not expected that the Merger will qualify as a tax-deferred “reorganization” within the meaning of Section 368(a) of the U.S. Tax Code. In addition, the Merger is not expected to constitute a tax-deferred exchange within the meaning Section 351 of the U.S. Tax Code. On this basis, the Merger is expected to be taxable to U.S. Holders of Class A Shares and IIAC Public Warrants.

Holders of Class A Shares and IIAC Public Warrants should read carefully the information included under the section entitled “Material Tax Considerations” for a detailed discussion of material U.S. federal tax consequences of the Merger and the material U.S. federal, Dutch and Italian tax consequences of the ownership and disposition of Ordinary Shares and Zegna Public Warrants after the Business Combination. Holders of Class A Shares and IIAC Public Warrants are urged to consult their tax advisors to determine the tax consequences to them (including the application and effect of any state, local or other income and other tax laws) of the Merger and Business Combination, as relevant. Prospective holders of Ordinary Shares and Zegna Public Warrants are urged to consult their tax advisors to determine the tax consequences (including the application and effect of any state, local or other income and other tax laws) of any acquisition, holding, redemption and disposal of Ordinary Shares or acquisition, holding, exercise or disposal of Zegna Public Warrants.

Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a capital reorganization in accordance with IFRS. Under this method of accounting, IIAC will be treated as the “acquired” company for financial reporting

 

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purposes, and Zegna will be the accounting “acquirer.” Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Zegna issuing shares for the net assets of IIAC, accompanied by a recapitalization. The net assets of IIAC will be stated at historical cost, with no goodwill or other intangible assets recorded.

Appraisal Rights

The Cayman Islands Companies Act prescribes when shareholder appraisal rights are available and sets limitations on such rights. Where such rights are available, shareholders are entitled to receive fair value for their shares. However, regardless of whether such rights are or are not available, shareholders are still entitled to exercise the rights of redemption as set out herein, and the IIAC Board has determined that the redemption proceeds payable to shareholders who exercise such redemption rights represents the fair value of those shares.

Section 238. (1) of the Cayman Islands Companies Act provides that a member of a constituent company incorporated thereunder shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation.

Section 239. (1) of the Cayman Islands Companies Act provides that no rights under section 238 of the Cayman Islands Companies Act shall be available in respect of the shares of any class for which an open market exists on a recognised stock exchange or recognised interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5) of the Cayman Islands Companies Act, provided that such section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to section 233 or 237 of the Cayman Islands Companies Act to accept for such shares anything except: (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognised interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c).

IIAC shareholders who are considering exercising dissenter’s rights are advised to consult appropriate legal counsel.

Proxy Solicitation

Proxies may be solicited by mail, via telephone or via e-mail or other electronic correspondence. IIAC has engaged Morrow to assist in the solicitation of proxies.

If an IIAC shareholder grants a proxy, such shareholder may still vote its shares in person if it revokes its proxy before the General Meeting. An IIAC shareholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “General Meeting of IIAC Shareholders—Revoking Your Proxy.”

Risk Factor Summary

The Zegna business and the Business Combination are subject to numerous risks. In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” The occurrence of one or more of the events or the circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may adversely affect Zegna’s and IIAC’s ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect

 

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on the business, cash flows, financial condition or results of operations of Zegna. These risks include the following:

Risks Related to the Business Combination and IIAC

 

 

If the conditions to the Business Combination Agreement are not met, the Business Combination may not occur.

 

 

IIAC and Zegna will incur significant transaction and transition costs in connection with the Business Combination.

 

 

The IIAC Sponsor and each of IIAC’s officers and directors agreed to vote in favor of IIAC’s initial business combination, including the Business Combination, regardless of how IIAC’s public shareholders vote.

 

 

Since the IIAC Sponsor and IIAC’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of IIAC’s shareholders, a conflict of interest may have existed in determining whether the Business Combination with Zegna is appropriate as IIAC’s initial business combination. Such interests include that the IIAC Sponsor and IIAC’s directors and executive officers will lose their entire investment in IIAC if an initial business combination is not completed, and that the IIAC Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate IIAC.

 

 

The ability of IIAC public shareholders to exercise redemption rights with respect to a large number of IIAC Ordinary Shares could increase the probability that the Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

 

 

A significant portion of IIAC’s total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of Ordinary Shares to drop significantly, even if Zegna’s business is doing well.

Risks Related to Zegna’s Business Following the Business Combination

 

 

Zegna’s business depends on the recognition, integrity and reputation of its brands and on its ability to identify and respond to new and changing customer preferences.

 

 

The COVID-19 pandemic or similar public health crises may materially and adversely affect Zegna’s business.

 

 

Zegna may not be able to successfully implement its strategy, including the successful consolidation of the shift toward luxury leisurewear, the successful design and introduction of new iconic products, the preservation of quality and the use of digital tools to strengthen business processes, attract new customers and retain the existing customer base, and growing the Thom Browne brand.

 

 

Disruptions to Zegna’s manufacturing and logistics facilities, including as a result of the COVID-19 pandemic, may adversely affect Zegna’s business.

 

 

The sale of Zegna’s products through its DTC channel and directly operated stores is subject to certain risks, including as a result of difficulties in renewing the existing lease agreements, increases in rental charges or declines in sales, which may adversely affect Zegna’s business.

 

In the wholesale channel, Zegna is subject to certain risks arising from points of sale operated by third parties, and is dependent on its local partners to sell products in certain markets.

 

 

Fluctuations in the price or quality of, or disruptions in the availability of, raw materials used by Zegna in its products, could cause Zegna to incur increased costs, disrupt its manufacturing processes or prevent or delay Zegna from meeting its customers’ demands.

 

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Zegna could be adversely affected if it is unable to negotiate, maintain or renew its license agreements and strategic alliances.

 

 

Shifts in travel patterns or declines in travel volumes, including as a result of the COVID-19 pandemic, have had in the past, and may have in the future, an adverse effect on Zegna’s business, results of operations and financial condition.

 

 

Changes in local economic, business, regulatory, social and political conditions, as well as changes in general economic conditions and changes in demand for luxury goods may adversely affect Zegna’s business.

 

 

Disruptions or breaches compromising Zegna’s information technology systems or the personal information of Zegna’s customers may adversely affect Zegna’s business.

 

 

Zegna is dependent on the protection of its intellectual property rights and there can be no assurance that it will succeed in protecting such rights in the jurisdictions in which Zegna operates.

 

 

Changes in trade policy, the imposition of tariffs, the enactment of tax reforms and other changes in laws and regulations may have an adverse effect on the demand for Zegna’s products and Zegna’s business.

 

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ZEGNA

The following tables show summary historical financial information of Zegna for the periods and as of the dates indicated.

The summary historical financial information of Zegna as of December 31, 2020 and 2019 and January 1, 2019 and for each of the three years in the period ended December 31, 2020 was derived from the Zegna Annual Consolidated Financial Statements included elsewhere in this proxy statement/prospectus, which have been restated as discussed in Note 43 thereof.

The summary historical financial information of Zegna as of June 30, 2021 and for the six months ended June 30, 2021 and June 30, 2020 was derived from the Zegna Semi-Annual Unaudited Condensed Consolidated Financial Statements included elsewhere in this proxy statement/prospectus.

The following summary historical financial information should be read together with the Zegna Annual Consolidated Financial Statements, the Zegna Semi-Annual Unaudited Condensed Consolidated Financial Statements and “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this proxy statement/prospectus. The financial summary historical financial information in this section is not intended to replace Zegna’s consolidated financial statements and the related notes. Zegna’s historical results are not necessarily indicative of Zegna’s future results.

The financial information contained in this section relates to Zegna, prior to and without giving pro forma effect to the impact of the Business Combination and, as a result, the results reflected in this section may not be indicative of the results of the combined entity going forward. See the sections entitled, “Business of Zegna and Certain Information About Zegna” and “Unaudited Pro Forma Condensed Combined Financial Information” included elsewhere in this proxy statement/prospectus.

 

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Consolidated Statement of Profit and Loss Data

 

     Restated  
     For the years ended December 31,  
(Euro thousands)    2020      2019      2018  
     Restated      Restated      Restated  

Revenues

     1,014,733        1,321,327        1,182,563  

Other income

     5,373        7,873        6,392  

Cost of raw materials and consumables

     (250,569      (309,801      (209,122

Purchased, outsourced and other costs

     (286,926      (371,697      (366,879

Personnel costs

     (282,659      (331,944      (320,662

Depreciation, amortization and impairment of assets

     (185,930      (177,068      (160,588

Write downs and other provisions

     (6,178      (1,017      725  

Other operating costs

     (30,399      (49,034      (37,628
  

 

 

    

 

 

    

 

 

 

Operating (Loss)/Profit

     (22,555      88,639        94,801  

Financial income

     34,352        22,061        23,220  

Financial expenses

     (48,072      (37,492      (45,196

Exchange gains/(losses)

     13,455        (2,441      1,040  

Result from investments accounted for using the equity method

     (4,205      (1,534      (1,056

Impairments of investments accounted for using the equity method

     (4,532      —          (2,900
  

 

 

    

 

 

    

 

 

 

(Loss)/Profit before taxes

     (31,557      69,233        69,909  

Income taxes

     (14,983      (43,794      (29,395
  

 

 

    

 

 

    

 

 

 

(Loss)/Profit for the year

     (46,540      25,439        40,514  

Attributable to:

        

Shareholders of the parent company

     (50,577      21,749        37,714  

Non-controlling interests

     4,037        3,690        2,800  

Earnings per share in Euro — Basic and diluted

     (12.55      5.40        9.37  

Weighted average number of shares outstanding — Basic and diluted

     4,029,782        4,031,222        4,025,536  

 

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     For the six months ended June 30,  
(Euro thousands)    2021      2020  

Revenues

     603,340        402,386  

Other income

     5,367        5,177  

Cost of raw materials and consumables

     (161,298      (104,030

Purchased, outsourced and other costs

     (138,019      (117,622

Personnel costs

     (160,201      (139,771

Depreciation, amortization and impairment of assets

     (78,605      (89,043

(Write downs)/Reversal of write downs and other provisions

     (3,174      1,812  

Other operating costs

     (15,664      (20,140
  

 

 

    

 

 

 

Operating Profit/(Loss)

     51,746        (61,231 ) 

Financial income

     32,531        13,388  

Financial expenses

     (16,685      (24,105

Exchange losses

     (2,728      (3,190

Result from investments accounted for using the equity method

     (346      (3,286

Impairments of investments accounted for using the equity method

     —          (3,681
  

 

 

    

 

 

 

Profit/(Loss) before taxes

     64,518        (82,105 ) 

Income taxes

     (32,284      (5,650
  

 

 

    

 

 

 

Profit/(Loss) for the period

     32,234        (87,755 ) 

Attributable to:

     

Shareholders of the Parent Company

     28,157        (86,707 ) 

Non-controlling interests

     4,077        (1,048 ) 

Basic earnings per share in Euro

     6.98        (21.51

Diluted earnings per share in Euro

     6.95        (21.51

Basic weighted average number of shares outstanding

     4,031,611        4,030,986  

Diluted weighted average number of shares outstanding

     4,050,302        4,030,986  

 

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Consolidated Statement of Financial Position Data

 

     Restated  
     At December 31,      At January 1,  
(Euro thousands)    2020      2019      2019  
     Restated      Restated      Restated  

Assets

        

Total non-current assets

     1,175,898        1,392,772        1,419,144  

Total current assets

     1,239,156        1,246,625        1,374,848  

Total assets

     2,415,054        2,639,397        2,793,992  
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

        

Share capital

     4,300        4,300        4,300  

Retained earnings

     893,236        944,489        936,555  

Other reserves

     (295,772      (260,017      (249,578

Equity attributable to non-controlling interest

     43,270        40,982        34,210  

Total equity

     645,034        729,754        725,487  
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     1,234,566        1,302,265        1,419,972  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     535,454        607,378        648,533  

Total equity and liabilities

     2,415,054        2,639,397        2,793,992  
  

 

 

    

 

 

    

 

 

 

 

(Euro thousands)    At June 30, 2021  

Assets

  

Total non-current assets

     972,293  

Total current assets

     1,496,211  
  

 

 

 

Total assets

     2,468,504  
  

Liabilities and Equity

  

Share capital

     4,300  

Retained earnings

     925,475  

Other reserves

     (270,384

Equity attributable to non-controlling interest

     44,289  
  

 

 

 

Total equity

     703,680  

Total non-current liabilities

     1,129,469  

Total current liabilities

     635,355  
  

 

 

 

Total equity and liabilities

     2,468,504  

Consolidated Cash Flow Statement

 

     Restated  
     For the years ended December 31,  
(Euro thousands)    2020      2019      2018  
     Restated      Restated      Restated  

Net cash flows from operating activities

     70,906        174,122        192,765  

Net cash flows from/(used in) investing activities

     92,572        83,961        (334,546

Net cash flows (used in)/from financing activities

     (49,052      (267,486      131,868  

Net increase/(decrease) in cash and cash equivalents

     106,665        (7,705      (10,275

Cash and cash equivalents at the beginning of the year

     210,626        218,331        228,606  

Cash and cash equivalents at the end of the year

     317,291        210,626        218,331  

 

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     For the six months ended June 30,  
(Euro thousands)        2021              2020      

Net cash flows from/(used in) operating activities

     90,871        (64,394

Net cash flows (used in)/from investing activities

     (89,286      61,855  

Net cash flows (used in)/from financing activities

     (27,882      13,910  

Net (decrease)/increase in cash and cash equivalents

     (23,534      9,975  

Cash and cash equivalents at the beginning of the period

     317,291        210,626  

Cash and cash equivalents at end of the period

     285,937        220,601  

 

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SUMMARY HISTORICAL FINANCIAL DATA OF IIAC

The following tables contain summary historical financial data for IIAC. Such data as of December 31, 2020, and for the period from September 7, 2020 (inception) through December 31, 2020 has been derived from the audited financial statements of IIAC included elsewhere in this proxy statement/prospectus. The selected historical interim data as of September 30, 2021 and for the nine months ended September 30, 2021 are derived from IIAC’s unaudited financial statements included elsewhere in this proxy statement/prospectus.

The information below is only a summary and should be read in conjunction with IIAC’s financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement/prospectus and the section entitled “IIAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” IIAC’s historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

 

     For the Nine
Months Ended
September 30,
2021
     Period from
September 7,
2020 (inception)
through
September 30,
2020
 
     (As Restated)      (As Restated)  

Statement of Operations Data

     

General and administrative expenses

   $ 1,445,975      $ 11,074  

Loss from operations

     (1,445,975    $ (11,074
  

 

 

    

 

 

 

Dividend income on investment held in Trust Account

     18,127        —    

Change in fair value of warrant liabilities

     3,419,833        —    

Change in value of other derivative instruments

     (5,048,594   

 

—  

 

Other Income (Expense)

     (1,610,634      —    
  

 

 

    

 

 

 

Net Income (Loss)

   $ (3,056,609      (11,074
  

 

 

    

 

 

 

Weighted average shares outstanding of Class A ordinary shares

     40,250,000        —    
  

 

 

    

 

 

 

Basic and diluted net income per share of Class A ordinary shares

   $ (0.06    $ —    

Weighted average shares outstanding of Class B ordinary shares

     10,062,500        10,062,500  
  

 

 

    

 

 

 

Basic and diluted net income (loss) per share of Class B ordinary shares

   $ (0.06    $ —    
  

 

 

    

 

 

 

 

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     September 30,
2021
    December 31,
2020
 
     (As Restated)
(Unaudited)
    (As Restated)  

Condensed Balance Sheet Data (At Period End):

    

Total assets

   $ 403,573,057     $ 404,295,958  

Total liabilities

   $ 47,072,622     $ 44,668,235  

Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 40,250,000 shares subject to possible redemption at $10.00 per share at both September 30, 2021 and December 31, 2020

     402,500,000       402,500,000  

Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 40,250,000 shares subject to possible redemption) at both September 30, 2021 and December 31, 2020

     —         —    

Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 10,062,500 shares issued and outstanding at September 30, 2021 and December 31, 2020

     1,006       1,006  

Total shareholders’ equity

   $ (45,999,565   $ (42,872,277

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

IIAC is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination and the PIPE Financing.

The following unaudited pro forma condensed combined statement of financial position as of June 30, 2021 combines the historical statement of financial position of IIAC as of June 30, 2021 with the historical condensed consolidated statement of financial position of Zegna as of June 30, 2021 giving pro forma effect to the Business Combination and the PIPE Financing, as if they had occurred as of June 30, 2021.

The following unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2021 combine the historical statement of operations of IIAC for the six months ended June 30, 2021, and the historical condensed consolidated statements of operations of Zegna for six months ended June 30, 2021, giving pro forma effect to the Business Combination and the PIPE Financing as if they had occurred on January 1, 2020, the beginning of the earliest period presented.

The following unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 combine the historical statement of operations of IIAC for the year ended December 31, 2020, and the historical consolidated statements of operations of Zegna for year ended December 31, 2020, giving pro forma effect to the Business Combination and the PIPE Financing as if they had occurred on January 1, 2020, the beginning of the earliest period presented.

The pro forma condensed combined financial information has been prepared assuming two alternative scenarios regarding redemption of Class A Shares into cash:

 

   

Scenario 1 – No Redemptions: This presentation assumes that no IIAC shareholders exercise redemption rights with respect to their Class A Shares upon consummation of the Business Combination;

 

   

Scenario 2 – Maximum Redemptions: This scenario assumes that IIAC shareholders redeem 25,250,000 of the outstanding Class A Shares (approximately 62.7% of the outstanding Class A Shares) for their pro rata share of the cash in the Trust Account for aggregate redemption payments of €212.5 million ($252.5 million) at a redemption price of approximately $10.00 per share (€8.42 per share) based on the investments held in the Trust Account as of June 30, 2021. The maximum redemption scenario is based on the defined Aggregate Transaction Proceeds of €184,500,000 and $400,000,000, which subject to the application of the Deal-Contingent Forward, is approximately €519,900,000 ($619,300,000) consisting of (i) the cash held in the Trust Account after giving effect to the IIAC shareholder redemptions, (ii) the proceeds from the Forward Purchase and (iii) the Aggregate PIPE Proceeds. Scenario 2 includes all adjustments contained in Scenario 1 and presents additional adjustments to reflect the effect of the maximum redemptions.

 

     No
Redemptions
     Maximum
Redemptions
 
     (in thousands, except share and per
share data)
 

Summary Unaudited Pro Forma Condensed Combined

     

Statement of Operations Data Six Months Ended June 30, 2021

     

Revenue

   603,645      603,645  

Net Income attributable to Parent

   31,548      31,548  

Basic weighted average shares outstanding

     249,081,250        223,831,250  

Basic earnings per share

   0.13      0.14  

Diluted weighted average shares outstanding

     250,015,800        224,765,800  

Diluted earnings per share

   0.13      0.14  

 

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     No
Redemptions
     Maximum
Redemptions
 
     (in thousands, except share and per
share data)
 

Summary Unaudited Pro Forma Condensed Combined

     

Balance Sheet Data as of June 30, 2021

     

Total assets

   2,456,576      2,244,106  

Total liabilities

   1,807,717      1,807,717  

Total equity

   648,859      436,389  

 

     No
Redemptions
    Maximum
Redemptions
 
     (in thousands, except share and per
share data)
 

Summary Unaudited Pro Forma Condensed Combined

    

Statement of Operations Data Year Ended December 31, 2020

    

Revenue

   1,004,928     1,004,928  

Net loss attributable to Parent

   (175,591   (178,639

Weighted average shares outstanding – basic and diluted

     249,081,250       223,831,250  

Loss per share – basic and diluted

   (0.70   (0.80

The historical financial statements of Zegna have been prepared in accordance with IFRS as issued by the IASB and in its presentation currency of the Euro. The historical financial statements of IIAC have been prepared in accordance with U.S. GAAP in its presentation currency of the U.S. Dollar. The condensed combined pro forma financial information reflects IFRS, the basis of accounting used by the registrant, the Company, and the historical financial information of IIAC has been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the unaudited condensed combined pro forma financial information (see Note 2 – IFRS Policy and Presentation Alignment). For purposes of preparing this presentation the historical statement of financial position of IIAC has been translated into Euros at the rate on June 30, 2021 of $1.00 to €0.8415, the historical statement of operations of IIAC for the six months ended June 30, 2021 has been translated into Euros using the average exchange rate for the period from January 1, 2021 through June 30, 2021 of $1.00 to €0.8297 and the historical statement of operations of IIAC for the year ended December 31, 2020 has been translated into Euros using the average exchange rate for the period from September 7, 2020 (inception) through December 31, 2020 of $1.00 to €0.8410.

This information should be read together with the consolidated financial statements of Zegna as of and for the year ended December 31, 2020 and its related notes and the unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2021 and its related notes and the consolidated financial statements of IIAC as of and for the year ended December 31, 2020 and its related notes and the unaudited condensed consolidated financial Statements as of and for the six months ended June 30, 2021 and its related notes, “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “IIAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus.

The summary unaudited pro forma condensed combined financial information is presented for illustrative purposes only. Such information is only a summary and should be read in conjunction with the section titled “Unaudited Pro Forma Combined Financial Information.” The financial results could have been different had the companies been combined for the referenced period. The unaudited pro forma condensed combined financial information should not be relied on as being indicative of the historical results that would have been achieved had the companies been combined for the referenced period or the future results that the Combined Company will experience. Zegna and IIAC have not had any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

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RISK FACTORS

You should carefully review and consider the following risk factors, together with all of the other information contained in this proxy statement/prospectus, including the financial statements and notes to the financial statements included herein and the matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements,” in evaluating the Business Combination and the proposals to be voted on at the General Meeting. Certain of the following risk factors apply to the business and operations of Zegna and will also apply to its business and operations following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of Zegna following the Business Combination. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by Zegna and IIAC which later may prove to be incorrect or incomplete. You are encouraged to perform you own investigation with respect to the businesses of Zegna and IIAC. Zegna and IIAC may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair their business or financial condition.

Risks Related to Zegna’s Business Following the Business Combination

Throughout this section, unless otherwise indicated or the context otherwise requires, references to “Zegna,” “we,” “us,” “our” and other similar terms refer to Zegna, prior to and/or after giving effect to the Business Combination, as the context may require.

Risk factors relating to Zegna’s business, strategy and operations

Our business depends on the recognition, integrity and reputation of our brands.

We design, manufacture, promote and sell luxury goods under a number of brands, including Ermenegildo Zegna, Z Zegna, Ermenegildo Zegna XXX and Thom Browne. Our sales and our ability to achieve premium pricing depend on the perception, recognition and reputation of our brands, which, in turn, depend on factors such as product design, the distinctive character and the quality of our products and customer service, the image of our stores and those of our franchisees and other wholesale customers, the success of our advertising and communication activities and our general corporate profile.

The recognition, integrity and reputation of our brands are among our most valuable assets, which are influenced by several factors, some of which are outside of our control. Factors that may adversely affect our brands’ image include our inability to respond adequately to the needs and expectations of our customers with regard to the quality, style and design of our products, the dissemination by third parties of information that is untrue or defamatory, the commencement of litigation proceedings against us, as well as factors attributable to the parallel distribution and counterfeiting of our products. Each of these factors could harm the recognition, integrity and reputation of our brands, causing us to lose existing customers or fail to attract new customers, or otherwise having a material adverse effect on our business, results of operations and financial condition.

Our reputation may also suffer as a result of facts depending on our suppliers. While we closely monitor our suppliers to ensure that they comply with all applicable laws and regulations, if suppliers fail to comply with applicable law, including those relating to labor, social security, health and safety, or if they deliver products that are defective or differ from our specifications or quality standards or do not comply with applicable law, this could have adverse effects on our production cycle and cause delays in product deliveries to our customers, which in turn could damage our reputation, with possible adverse effects on our business, results of operations and financial condition.

 

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Our success depends on our ability to anticipate trends and to identify and respond to new and changing consumer preferences.

Our continued success depends in part on our ability to set and define product and fashion trends, and in part on our ability to identify and respond to changing consumer preferences in a timely manner. Our products must appeal to an evolving customer base whose preferences cannot be predicted with certainty and are subject to increasingly rapid change, while preserving the image and recognition of our brands. Although we dedicate considerable resources to market analysis and the identification of new fashion trends, we may not be able to promptly anticipate fashion trends or to quickly adapt to these trends during the design and manufacturing stages. If we fail to identify or promptly respond to new trends or changing consumer preferences, our brands’ reputation may be affected, which could result in unsold products or a decline in sales to customers and could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks related to the COVID-19 pandemic or similar public health crises that may materially and adversely affect our business.

Public health crises such as pandemics or similar outbreaks could adversely impact our business. The global spread of COVID-19 led to governments around the world mandating increasingly restrictive measures to contain the pandemic, including quarantine, social distancing, “shelter in place” or similar orders, travel restrictions and suspension of non-essential business activities. The COVID-19 pandemic has caused significant disruption to the global economy, consumer spending and behavior, tourism, supply chains and financial markets, leading to a global economic slowdown and a severe recession in several of the markets in which we operate, which may persist even after all restrictions are lifted.

From mid-March 2020 we temporarily suspended production at all of our manufacturing and logistics facilities in Italy, Switzerland, Turkey and Spain. While starting from the mid-second quarter of 2020 we were able to resume manufacturing activities, both our DOSs and our distribution partners’ stores in many places around the world were subject to temporary closures in 2020 and 2021 pursuant to local emergency regulations, with an adverse impact on our sales. In connection with the COVID-19 pandemic and related government measures, we have experienced delays in deliveries of raw materials from suppliers and of our products to wholesale customers, as well as running costs related to our workforce, despite furlough or reduced hours schemes we implemented with respect to certain of our employees. At the reopening of our manufacturing and logistics facilities in Italy and Switzerland, we introduced measures and protocols to safeguard the health and safety of our workforce in accordance with local laws. For further information on the impact of the COVID-19 pandemic on our results of operations and liquidity, see “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Zegna’s Financial Condition and Results of Operations.” While we continued to serve our customers through our remote selling and online e-commerce websites during the periods in which our DOSs were closed, the store closures resulted in a significant decline in our revenues and ability to generate cash flows from operations. The COVID-19 pandemic has also resulted in a decline in the level of consumer purchases of discretionary items and luxury retail products, including our products, caused by lower disposable income levels, travel restrictions, the prevalence of remote working arrangements and other factors. As a result of store closures and lower consumer demand, including those resulting from changes in consumer traffic and shopping preferences, we experienced a build-up of inventory.

While the overall COVID-19 situation appears to have improved in countries that have rolled out vaccination campaigns, our business and operating results may be negatively impacted if the virus worsens or mutates, if vaccination efforts are unsuccessful or if regions or countries implement further restrictions to contain the virus. We may experience a new shutdown or slowdown of all or part of our manufacturing and logistics facilities, and of our stores. Management time and resources were required to be, and in the future may need to be, spent on COVID-19 related matters, distracting them from the implementation of our strategy. In addition, the prophylactic measures we are required to adopt at our facilities may be costly and may affect production levels.

 

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Our suppliers, customers and other contractual counterparties may be restricted or prevented from conducting business activities for indefinite or intermittent periods of time. The COVID-19 pandemic may lead to financial distress for our suppliers or wholesale customers, as a result of which they may have to permanently discontinue or substantially reduce their operations. Any of the foregoing could disrupt our supply chain and/or limit customer demand or our capacity to meet customer demand and have a material adverse effect on our business, results of operations and financial condition.

The impact of the COVID-19 pandemic on our business, results of operations and financial condition will depend largely on future events outside of our control, including ongoing developments in the pandemic, the success of containment measures, vaccination campaigns and other actions taken by governments around the world, as well as the overall condition and outlook of the global economy. However, the effects on our business, results of operations and financial condition may be material and adverse.

The COVID-19 pandemic may also exacerbate other risks disclosed in this “Risk Factors” section, including, but not limited to, our competitiveness, demand for our products, shifting consumer preferences, exchange rate fluctuations, and availability and price of raw materials.

We operate in many countries around the world and, accordingly, we are exposed to various international business, regulatory, social and political risks.

We operate in about 80 countries worldwide through a direct and indirect distribution network. For the year ended December 31, 2020, 54% of our revenues were generated in APAC, 31% were generated in EMEA, 13% were generated in North America and 1% were generated in Latin America.

Our operations in various international markets expose us to various risks, including those arising from: competition with local competitors (which may have greater resources and/or more favorable market positions); the diversity of consumers’ tastes and preferences and our ability to anticipate or respond to such tastes and preferences; changes in the political and economic environments in the countries where we operate; changes in regulations, including tax regulations, and the imposition of new duties or other protectionist measures; strict regulations affecting the import and processing of certain raw materials and finished goods; the occurrence of acts of terrorism or similar events, conflicts, civil unrest or situations of political instability; parallel imports of goods at terms inconsistent with our guidelines and distribution of our products, in violation of exclusive territorial rights granted to other importers and licensees (the so-called “gray market”). These or other factors may harm our business in international markets or cause us to incur significant costs in these markets, which could have a material adverse effect on our business, results of operations and financial condition.

Developments in Greater China and other growth and emerging markets may adversely affect our business.

We operate in a number of growth and emerging markets, both directly and through our distribution partners. In particular, a significant proportion of our sales are in the Greater China Region (which for Zegna’s reporting purposes includes the Chinese mainland, Hong Kong S.A.R., Macau S.A.R. and Taiwan) (representing 43% and 35% of our revenue in 2020 and 2019, respectively), where we have had a direct retail presence since 1991. While demand in these markets has increased in recent years due to sustained economic growth and growth in personal income and wealth, economic growth in these markets may not be sustained in the future. For example, rising geopolitical tensions and potential slowdowns in the rate of growth there and in other emerging markets could cause a decline in our sales there, or limit the opportunity for us to increase sales of our products and revenues in those regions in the near term.

Economic and political developments in emerging markets, including economic crises or political instability, have had and could have in the future material adverse effects on our business, results of operations and financial condition. Government actions may also impact the market for luxury goods in these markets, such as tax changes or the active discouragement of luxury purchases. Consumer spending habits in these markets may also

 

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change due to other factors that are outside of our control. For instance, towards the end of August the President of the People’s Republic of China signalled the government’s intention to regulate excessively high incomes and encourage high-income groups and enterprises to return more to society. While no regulatory action has been taken to date, similar statements by governmental authorities may affect the social acceptability of spending on luxury goods.

Maintaining our position in these growth and emerging markets is a key component of our global strategy. However, initiatives from several global luxury goods manufacturers have increased competitive pressures for luxury goods in several emerging markets. As these markets continue to grow, we anticipate that additional competitors, both international and domestic, will seek to enter these markets and that existing market participants will try to aggressively protect or increase their sales. Increased competition may result in pricing pressure, reduced margins and our inability to increase or maintain our sales levels, which could have a material adverse effect on our results of operations and financial condition. See also “—The markets in which we operate are highly competitive.

Failure to implement our strategy could adversely affect our results of operations.

Our ability to increase our revenues and pursue growth and development objectives depends, in part, upon our success in carrying out our strategic plan. As part of our strategy, we are pursuing, among other things, the successful consolidation of our shift toward luxury leisurewear, the successful design and introduction of new iconic products, the preservation of the exceptional quality we are known for and the use of digital tools to strengthen our processes, attract new customers and retain our existing customer base, and the growth of the Thom Browne brand, which depends on the brand’s positive momentum and successful customer proposition. See “Business of Zegna and Certain Information About Zegna—Strategy.” Our strategy is premised upon certain assumptions about the global economy and the evolution of demand for luxury goods in various regions of the world in which we operate or seek to operate our competitive position ant the ability of our management team to carry out our strategic plan. If we fail to implement our strategic plan or if our assumptions prove to be incorrect, our ability to increase our revenues and profitability could be affected, which could have a material adverse effect on our business, results of operations and financial condition.

We depend on our manufacturing and logistics facilities, which are subject to disruption.

We operate manufacturing and logistics facilities in Italy, Switzerland, Turkey and Spain and logistics facilities in the People’s Republic of China and the United States. These facilities are subject to operational risks, including mechanical and information technology system failure, work stoppage, civil unrest, increases in transportation costs, natural disasters, fire, government imposed shutdowns and disruption to supplies of raw materials. Any interruption of activity in our manufacturing or logistics facilities due to these or other similar events outside of our control could result in disruption to our operations and a reduction in sales, which could have an adverse effect on our business, results of operations and financial condition. See “—We are subject to risks related to the COVID-19 pandemic or similar public health crises that may materially and adversely affect our business.

We are subject to certain risks related to the sale of our products through our DTC channel and in particular our directly operated stores.

In our distribution model, the direct-to-consumer (“DTC”) channel consists of single branded stores managed directly by us, or DOSs, outlets, concessions within department stores, as well as a directly managed online boutique and other e-commerce platforms through which we sell directly to our customers. As of December 31, 2020, we operated 255 Zegna DOSs (including 17 DOSs which were converted into a franchising in January 2021) and 38 Thom Browne DOSs. The DTC channel generated revenues of €613 million in 2020 (or 60% of our consolidated revenues in such period).

 

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The risks related to managing currently existing DOSs mainly relate to possible difficulties in renewing the existing lease agreements, an increase in rental charges and a decline in sales.

Our DOSs are all located in properties that we lease from third parties. There is significant competition among retail operators in our industry to obtain commercial spaces in prestigious locations in major cities, towns and resort destinations worldwide. Accordingly, to renew our lease agreements, we may have to compete with other operators, including those in our same industry, some of which have greater economic and financial resources than ours or otherwise more bargaining power. If we are unable to renew our lease agreements with economic terms consistent or more beneficial than those currently applicable, or if we are forced to accept rental charges which are substantially higher than the existing ones, this could have a material adverse effect on our business, results of operations and financial condition.

Our DOSs have a high level of fixed costs, which affect profits from the retail channel. A reduction in sales or a decrease in revenues from the retail channel could, in light of the high level of fixed costs, have a material adverse effect on our business, results of operations and financial condition.

We analyze the performance of each of our DOSs and market trends in order to assess whether to open new DOSs (or move DOSs to a different location), renew existing leases, or close DOSs that are underperforming. If our analysis is inadequate or based on the wrong assumptions, we could select sub-optimal locations for our stores, or keep or open underperforming stores, which could have a material adverse effect on our business, results of operations and financial condition.

In addition, although we have adopted internal policies and training initiatives to ensure that the staff in our DOSs operate in a manner consistent with the image and prestige of our brands, there can be no assurance that such staff will abide by such policies or that inappropriate or illicit behavior by certain employees will not occur. If there is any allegation brought against us as a result of negligence or other impermissible conduct by our DOS staff, we may be exposed to legal or other proceedings or increased public scrutiny, which may result in substantial costs, diversion of resources and management’s attention and potential harm to our reputation.

The operations of our retail channel and DOSs are also subject to risks such as information technology system failure, work stoppage, civil unrest, natural disasters, fire and government imposed shutdowns. Any interruption of activity in our retail channel and DOSs due to these or other similar events out of our control could result in disruption to our operations and a reduction in sales, which could have an adverse effect on our business, results of operations and financial condition.

In the wholesale channel, we are subject to certain risks arising from points of sale operated by third parties, and we are dependent on our local partners to sell our products in certain markets.

In the wholesale channel, we sell our products to franchisees, specialty stores, department stores and online retailers. In the year ended December 31, 2020, revenues attributable to the wholesale channel for the Zegna Branded Products and Thom Browne amounted to €203 million (or 20% of our consolidated revenues in the same period). The loss of existing commercial relationships with our primary wholesale customers, the failure to develop new commercial relationships on economically favorable terms (or at all) or a significant decrease in wholesale channel revenues could have a material adverse effect on our business, results of operation and financial condition. In addition, any failure by retail stores not directly operated by us to manage their stores in a manner consistent with the image and prestige of our brands or in line with any agreed contractual commitments (including in terms of sale prices), or failure by online retailers to comply with consumer protection laws or provide accurate product descriptions, could damage the competitive position and image of our brand, with potential material adverse effects on our business, results of operations and financial condition. See “—Our business depends on the recognition, integrity and reputation of our brands.”

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experienced significant problems in the past with such wholesale customers, the loss of one or more important commercial relationships with, or the occurrence of material disagreements with, our distribution partners or a failure to renew or develop commercial relationships on economically favorable terms (or at all) with them could have a material adverse effect on our business, results of operations and financial condition.

Our operations are also subject to the risk of insolvency of our wholesale customers. Despite our efforts to mitigate such risk, there can be no assurance that we will be able to do so successfully, and our business, results of operations and financial condition could be materially adversely affected.

Fluctuations in the price or quality of, or disruptions in the availability of, raw materials used in our products could cause us to incur increased costs, disrupt our manufacturing processes or prevent or delay us from meeting our customers’ demands.

We require high quality raw materials in order to produce our products. The market price of the raw materials that we require for our production depends on many factors that are largely out of our control and which are difficult to predict. The primary raw materials we use are yarns (in particular, wool yarns), silk, cotton, linen, cashmere, fabrics and leather. The availability of wool and silk depends on unpredictable factors which are outside our control, including weather conditions in the areas where these raw materials originate (mainly Australia and New Zealand for wool and Greater China for silk), as well as diseases affecting livestock. We also use rare raw materials, such as vicuna yarns, which are only available in a very limited quantity and subject to strict export and processing regulations, which may change. Possible legislative, political and economic developments, potential social instability or the introduction of export restrictions or tariffs in the countries in which our suppliers operate, or the introduction of import restrictions on products from such countries, could have a negative impact on our procurement activities. These and other factors could affect the availability and price of the raw materials required for our production.

If the supply of such raw materials decreases (including due to shortages or to a decrease in the number of producers or suppliers of raw materials), we may face difficulties in obtaining sufficient supplies of high quality raw materials, and the relevant prices may increase. Thus, we could face supply shortages in the medium term and rising costs of purchasing. In addition, our suppliers could cancel or delay the delivery of raw materials to us, or may fail to provide raw materials that meet our high quality standards. This could delay our manufacturing process or cause us to incur increased costs to obtain raw materials of the quality we require. Any of the foregoing factors could have a material adverse effect on our business, results of operations or financial condition. Suppliers’ actions may also damage our reputation.

We could be adversely affected if we are unable to negotiate, maintain or renew our license agreements and strategic alliances.

We are a party to various strategic alliances, as licensee or supplier, and license agreements, as licensor. In particular, we act as licensee for the production and distribution of Tom Ford menswear since 2008, and as supplier of menswear for Dunhill and for Gucci. During the year ended December 31, 2020, we recorded revenues of €82 million from these strategic alliances (after eliminations). See “Business of Zegna and Certain Information About Zegna—Brands, Collections and Products—Zegna Segment—Strategic Alliances Product Line” for further information on our strategic alliances. If we were to fail to comply with our obligations under these arrangements (including with respect to required quality standards and timeliness of deliveries), our strategic alliance partners may terminate, fail to renew or amend in a manner adverse to us the existing arrangements, which may have material adverse consequences on our business, results of operations and financial condition.

We are also party to certain license agreements whereby we grant, for a certain period of time, the use of our brand to third parties for the production of products in adjacent luxury sectors (including fragrances, glasses and sunglasses, cufflinks, and beachwear and underwear). For the year ended December 31, 2020, royalties relating

 

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to these arrangements were approximately €3 million. If any of these licensees were not to perform their obligations towards Zegna (including by failing to ensure the required quality standards, comply with our directions with respect to distribution channels and after sale services), we may be unable, in a commercially reasonable time, to replace such licensee with another producer capable of ensuring equivalent quality and production standards, or procure its services upon the same or substantially the same financial terms. Our inability to maintain a presence in these adjacent luxury sectors or to provide products in these sectors of a quality comparable to that of our other products may reflect negatively on the reputation and integrity of our brands.

We have also entered into co-branding projects for the production and co-marketing of certain selected co-branded products with Maserati, Leica Camera and Fear of God.

If any of the foregoing licensing agreements or strategic alliances are terminated for any reason, not renewed upon their expiration or renewed but with less favorable terms and conditions, this could have a material adverse effect on our business, results of operations and financial condition.

Our business depends on tourist traffic and demand.

A substantial amount of our sales is generated by customers who purchase products while travelling. Consequently, adverse economic conditions (such as financial crises), global political developments, other social and geopolitical sources of unrest, instability, disorders, riots, civil wars or military conflicts, natural disasters such as fire, floods, blizzards, global pandemics such as the COVID-19 pandemic and earthquakes or other events, as well as travel restrictions imposed by governments, which result in a shift in travel patterns or a decline in travel volumes, have had in the past, and may have in the future, an adverse effect on our business, results of operations and financial condition. See also “—We are subject to risks related to the COVID-19 pandemic or similar public health crises that may materially and adversely affect our business.

Our business success depends on certain key personnel.

The performance of our business depends significantly on the efforts and abilities of some key senior personnel, including our Chief Executive Officer, Mr. Ermenegildo Zegna. Such key personnel have substantial experience and expertise in the luxury goods business and have made significant contributions to the success of our business.

If such key personnel were to leave us abruptly, or become otherwise unable or unwilling to continue in their roles, we may not be able to replace them in a timely fashion. The failure to retain or replace such key personnel with other skilled personnel capable of integrating into our operations efficiently could lead to delays in the development of collections, inefficiencies in management of our business, and, accordingly, could have a material adverse effect on our business, results of operations and financial condition.

We depend on highly specialized craftsmanship and skills.

One of the distinguishing features of certain of our products is the highly specialized craftsmanship involved in their manufacturing, which is also a result of the experience that our specialized employees have acquired over the course of the years.

Although we try to preserve these craftsmanship skills and ensure that they are passed on to the next generations, the number of our specialized employees may decrease in the future and their craftsmanship skills may no longer be readily available. If this were to occur, it could affect our ability to ensure the distinctive quality of certain of our products in the future, which in turn could have a material adverse effect on our business, results of operations and financial condition.

 

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We depend on the protection of our intellectual property rights.

We believe that our intellectual property is essential to the success of our products and to our competitive position. We dedicate significant resources to the protection of our intellectual property assets (including trademarks, designs, production processes and technologies, utility patents and other distinctive marks) in the jurisdictions in which we operate. There can be no assurance, however, that we will succeed in protecting our intellectual property rights.

With respect to patents in particular, patent rights do not prevent our competitors from developing products that are substantially equivalent to or better than our products, while not infringing our intellectual property rights. Moreover, any actions we take to establish and protect our patents, trademarks and other intellectual property rights may not be adequate to prevent counterfeiting, imitation of our products by competitors or other third parties or to prevent these persons from asserting rights in, or ownership of, our brand trademarks and other intellectual property rights. We may therefore be forced to spend significant resources to defend our intellectual property from infringement or from third party claims. In addition, should third parties register intellectual property rights which overlap with ours, or should we attempt to enter new markets where third parties have registered intellectual property rights which are similar to those which we would wish to register, we may be constrained from developing our business in such markets. Moreover, changes in law or adverse judicial or administrative judgments could deprive us of the ownership or use of one or more of our intellectual property rights, which could require us to grant licenses to or to obtain licenses from third parties, to pay damages or to cease production of certain merchandise benefiting from such rights. Each of the above could have a material adverse effect on our business, results of operations and financial condition.

Third parties could make claims or bring legal action against us for an alleged infringement of such third parties’ intellectual property rights. As a result, we may be required to discontinue the sale of certain products, pay damages, incur licensing costs, modify our production processes and/or products, or have the scope or validity of our intellectual property rights determined in court in order to be authorized to sell such products. For instance, on June 28, 2021 adidas commenced an action against Thom Browne, Inc. in the Southern District of New York, for, among others, trademark infringement, unfair competition, dilution and various state claims, in connection with the use of Thom Browne’s five color grosgrain ribbon and the four bands on sleeves and pants on its sporting goods, sportswear and athletic wear, allegedly infringing the three stripe marks of adidas. Thom Browne, Inc. intends to vigorously defend against the claims. This or any other such events may entail significant losses in addition to legal costs, with possible adverse effects on our business, results of operations and financial condition.

A disruption in our information technology, including as a result of cybercrimes, could compromise confidential and sensitive information.

We depend on our information technology and data processing systems to operate our business, and a significant malfunction or disruption in the operation of our systems, human error, interruption to power supply, or a security breach that compromises the confidential and sensitive information stored in those systems, could disrupt our business and adversely impact our ability to operate. Our ability to keep our business operating effectively depends on the functional and efficient operation by us and our third party service providers of our information, data processing and telecommunications systems, including our product design, manufacturing, distribution, sales and marketing, billing and payment systems. We rely on these systems to enable a number of business processes and help us make a variety of day-to-day business decisions as well as to track operations, billings, payments and inventory. Such systems are susceptible to malfunctions and interruptions due to equipment damage, power outages, connection interruption, and a range of other hardware, software and network problems. Those systems are also susceptible to cybercrime, or threats of intentional disruption, which are increasing in terms of sophistication and frequency, with the consequence that such cyber incidents may remain undetected. For any of these reasons, we may experience system malfunctions or interruptions. For example, in August 2021 we were subject to a ransomware attack that impacted the majority of our IT systems. As we

 

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refused to engage in discussions relating to the payment of the ransom, the responsible parties published certain materials extracted from our IT systems. We publicly announced the IT systems breach and gradually restored our IT systems from secure back up servers during the weeks following the breach. Although our systems are diversified, including multiple server locations, third-party cloud providers and a range of software applications for different regions and functions, and we periodically assess and implement actions to ameliorate risks to our systems, a significant or large scale malfunction or interruption of our systems could adversely affect our ability to manage and keep our operations running efficiently, and damage our reputation if we are unable to track transactions and deliver products to our customers. A malfunction that results in a wider or sustained disruption to our business could have a material adverse effect on our business, results of operations and financial condition. In addition to supporting our operations, we use our systems to collect and store confidential and sensitive data, including information about our business, our customers and our employees. Any unauthorized access to our information systems may compromise the privacy of such data and expose us to claims as well as reputational damage. Ultimately, any significant violation of the integrity of our data security could have a material adverse effect on our business, results of operations and financial condition. See “—We are exposed to the risk that personal information of our customers, employees and other parties collected in the course of our operations may be damaged, lost, stolen, divulged or processed for unauthorized purposes.” Our recently acquired businesses may use different information technology and data processing systems than those used at a broader group level; which could make it more complex to prevent or timely address any of the foregoing events.

We are exposed to the risk that personal information of our customers, employees and other parties collected in the course of our operations may be damaged, lost, stolen, divulged or processed for unauthorized purposes.

In carrying out our business, we collect, store and process personal data of our customers, employees and other parties with whom we deal, including data we gather for product development and marketing purposes. Therefore we are subject to a variety of strict and ever-changing data protection and privacy laws on a global basis, including the EU General Data Protection Regulation.

We are exposed to the risk that personal data we store and use may be damaged or lost, stolen, divulged or processed for unauthorized purposes by the individuals responsible for data management or by unauthorized individuals (including third parties and Zegna employees). The destruction, damage to or loss of personal data, as well as its theft, unauthorized processing or dissemination, could significantly impair our reputation and impact our operations; it could also lead to governmental investigations and the imposition of fines by competent authorities, with possible adverse effects on our business, results of operations and financial condition. See also “—A disruption in our information technology, including as a result of cybercrimes, could compromise confidential and sensitive information.

We are subject to certain risks related to related party transactions.

We have engaged, and continue to engage, in relationships of a commercial nature with related parties. These relationships consist mainly in the provision of industrial services, the purchase of raw materials, as well as an interest-bearing loan and certain contributions to Fondazione Zegna. See “Certain Relationships and Related Party Transactions—Zegna Relationships and Related Party Transactions.” In addition, in connection with the Demerger, certain of our existing intercompany lease agreements for the lease of real estate properties will become related party transactions as we will continue to rent those properties from our current subsidiaries demerged prior to the Closing.

We believe that the terms and conditions of our transactions with related parties are at arm’s length and on commercial terms that are normal in the respective markets, considering the characteristics of the goods or services involved. However, there can be no assurance that if such transactions had been concluded between or with third parties, such parties would have negotiated or entered into agreements or carried out such transactions under the same or substantially similar terms and conditions.

 

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We are exposed to currency related risks.

We operate in numerous markets worldwide and are exposed to market risks stemming from fluctuations in currency exchange rates. In particular, changes in exchange rates between the Euro and the main foreign currencies in which we operate affect our revenues and results of operations. The exposure to currency risk is mainly linked to the differences in geographic distribution of our sourcing and manufacturing activities from those in our commercial activities, as a result of which our cash flows from sales are denominated in currencies different from those related to purchases or production activities. In particular, we incur a large portion of our capital and operating expenses in Euro while we receive the majority of our revenues in currencies other than Euro (mainly in Chinese Renminbi, U.S. Dollars, Japanese Yen, Canadian Dollar and British Pound). Therefore, our results may be adversely affected if these currencies depreciate against the Euro. Such risk is heightened given the extended time period between the moment when the sale prices of a collection are set and the moment when revenues are converted into Euro, which may extend up to 18 months. In addition, foreign exchange fluctuations might also negatively affect the relative purchasing power of our clients, which could also have an adverse effect on our results of operations. See “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operation—Key Factors Affecting Results of Operations.

Exchange rate fluctuation may also adversely affect our competitive position as compared to other operators in the luxury goods market, who may incur costs in other currencies with more favorable exchange rates relative to the currencies of our principal markets.

In the Zegna segment, we have historically sought to manage risks associated with fluctuations in currency through financial hedging instruments, mainly forward contracts for the sale of foreign currencies; we are gradually implementing similar policies also in the Thom Browne segment. However, there can be no assurance that we will be able to hedge currency related risks successfully, and our business, results of operations and financial condition could nevertheless be adversely affected by fluctuations in market rates, particularly if such fluctuations are extended over time.

In addition, because the Euro is the functional currency used in our consolidated financial statements, fluctuations in exchange rates used to translate figures in our subsidiaries’ financial statements that were originally expressed in a foreign currency could have a significant impact on results, net financial indebtedness, and consolidated net shareholders’ equity as expressed in Euro in our consolidated financial statements.

We are exposed to risks relating to fluctuations in interest rates and other market risks.

We have entered into Euro-denominated financing agreements providing for a floating interest rate. As of December 31, 2020, floating rate loans represented approximately 62% of our total borrowings, other financial liabilities and derivatives and financial instruments, for a financed amount of approximately €428.8 million. Although we have entered into derivative financial instruments to hedge our exposure to interest rate risk, an increase in interest rates during the term of such financing agreements, which would result in higher interest payments thereunder, could have a material adverse effect on our business, results of operations and financial condition.

As of December 31, 2020, we had approximately €350.2 million of other current financial assets invested in listed and unlisted financial instruments. We do not enter into investments for trading or speculative purposes. The primary objective of our investment activities is to preserve principal while maximizing the income that we receive from our investments without significantly increasing risk of loss. In connection with our investment activities, we may be exposed to market risk, i.e. the risk of loss related to changes in market prices, volatility, counterparty and liquidity of financial instruments, which could have a material adverse effect on our business, results of operations and financial condition.

 

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Risk factors relating to the industry in which Zegna operates

The markets in which we operate are highly competitive.

The markets for our products are characterized by high levels of competition and the presence of a number of established operators and new entrants, some of which have significant financial resources or well-known and fashionable brands. To succeed, we must interpret and anticipate the tastes, preferences and lifestyles of our customers and anticipate changes in those tastes, preferences and lifestyles, as well as identify fashion and luxury market trends, while producing high quality, desirable luxury products. Our competitors may be more successful in interpreting market trends or may be able to produce their products at lower costs. Our failure to compete effectively in our chosen markets, including through a failure to identify and respond to new and changing trends and consumer preferences, could have a material adverse effect on our business, results of operations and financial condition.

Global economic conditions and macro events may adversely affect us.

Our sales volumes and revenues may be affected by overall general economic conditions within the different countries in which we operate. Deteriorating general economic conditions may affect disposable incomes and reduce consumer wealth impacting client demand, particularly for luxury goods, which may negatively impact our profitability and put downward pressure on our prices and volumes. Furthermore, during recessionary periods, social acceptability of luxury purchases may decrease and higher taxes may be more likely to be imposed on certain luxury goods including our products, which may affect our sales.

We sell our products throughout the world. In particular, we conduct our business in EMEA, North and Latin America and APAC. Our presence in various international markets exposes us to the risks connected, among other things, with the geopolitical and macroeconomic conditions of the countries in which we operate. Sales could be affected by various events, such as, for example, market instability, terrorism, war, natural disasters or socio-political upheavals. In particular, the majority of our current sales are in Greater China and the United States. Therefore, slowing economic conditions in those countries may adversely affect our revenues in that region. See also “—Developments in Greater China and other growth and emerging markets may adversely affect our business.

If these events, which are difficult to predict, occur, this could have an adverse effect on the demand for luxury goods in a specific country or could cause a contraction in tourist flow, and may have a material adverse effect on our business, results of operations and financial condition.

We are subject to legal and regulatory risk.

We are required to comply with the laws and regulations applying to our products and operations in the various jurisdictions in which we operate, particularly in relation to the protection of intellectual property rights, competition, product safety, packaging and labeling, import and processing of certain raw materials and finished goods, data protection, limits on cash payments, worker health and safety and the environment. New legislation (or amendments to existing legislation) may require us to adopt stricter standards, which could lead to increased costs for adapting product characteristics or limit our operations, and this may have a material adverse effect on our business, results of operations and financial condition. We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, and other anti-bribery, anti-corruption and anti-money laundering laws in the countries in which we conduct activities. We and our distribution partners may have direct or indirect interactions with officials and employees of government agencies or state owned or affiliated entities and other third parties where we may be held liable for corrupt or other illegal activities, even if we do not explicitly authorize them. We are also subject to sanctions legislation, which may lead to commercial and economic sanctions, prohibitions and other restrictive measures imposed by the different authorities and governments involved, including the European Union, the United States, the United Nations and other international organizations. From time to time, we may conduct some limited activities in countries subject to sanctions or other restrictive measures. While we believe

 

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that our activities are in compliance with the applicable laws and sanctions legislation, including embargoes, we cannot exclude the possibility that we or our distribution partners may violate such laws. Any violation of the foregoing laws could lead to regulatory and/or judicial proceedings and sanctions (including civil penalties, denial of export privileges, injunctions, asset seizures and revocations or restrictions of licenses, as well as criminal fines and imprisonment), which may have a material adverse effect on our reputation, business, results of operations and financial condition.

Risk factors relating to Tax Matters

Changes in tax, tariff or fiscal policies could adversely affect demand for our products.

Imposition of any additional taxes and levies on our products could adversely affect the demand for our products and our results of operations. Changes in corporate and other taxation policies as well as changes in export and

other incentives given by various governments, or import or tariff policies, could also adversely affect our results of operations. Considerable uncertainty surrounds the introduction and scope of tariffs by countries around the world, as well as the potential for trade actions, and the imposition of tariffs and trade restrictions as a result of international trade disputes or changes in trade policies may adversely affect our sales and profitability. The occurrence of any the above may have a material adverse effect on our business, results of operations and financial condition.

Changes to taxation or the interpretation or application of tax laws could have an adverse impact on our results of operations and financial condition.

Our business is subject to various taxes in different jurisdictions (mainly Italy), which include, among others, the Italian corporate income tax (“IRES”), regional trade tax (“IRAP”), value added tax (“VAT”), excise duty, registration tax and other indirect taxes. We are exposed to the risk that our overall tax burden may increase in the future.

Changes in tax laws or regulations, or in the position of the relevant Italian and non-Italian authorities regarding the application, administration or interpretation of these laws or regulations, particularly if applied retrospectively, could have a material adverse effect on our business, results of operations and financial condition.

In addition, tax laws are complex and subject to subjective valuations and interpretive decisions, and we periodically may be subject to tax audits aimed at assessing our compliance with direct and indirect taxes. The tax authorities may not agree with our interpretations of, or the positions we have taken or intend to take on, tax laws applicable to our ordinary activities and extraordinary transactions. In case of challenges by the tax authorities to our interpretations, we could face long tax proceedings that could result in the payment of additional tax and penalties, with potential material adverse effects on our business, results of operations and financial condition.

We intend to be treated exclusively as a resident of the Republic of Italy for tax purposes, but Dutch or other tax authorities may seek to treat us as a tax resident of another jurisdiction as a result of which we could be subject to increased and/or different taxes.

As a result of the Conversion into a Dutch limited liability company (naamloze vennootschap), which is expected to occur immediately prior to the Closing, we will be deemed tax resident in the Netherlands for purposes of the Dutch Dividend Withholding Tax Act 1965 (Wet op de dividendbelasting 1965) and the Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969). However, we intend to maintain our management and organizational structure in such a manner that (i) our place of effective management would be in Italy and we should be regarded as a tax resident of Italy for Italian domestic law purposes; (ii) we should be considered to be exclusively tax resident in Italy for purposes of the applicable tax treaties, including the Convention between the

 

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Kingdom of the Netherlands and the Republic of Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital (the “Italy-Netherlands Tax Treaty”); and (iii) we should not be regarded as a tax resident of any jurisdiction other than Italy or the Netherlands either for purposes of the domestic tax laws of such jurisdiction or for the purposes of any applicable tax treaty. However, the determination of our tax residency depends primarily upon our place of effective management, which is largely a question of fact, based on all relevant circumstances. Therefore, no assurance can be given regarding the final determination of our tax residency by tax authorities. In addition, changes to applicable laws and income tax treaties, including a change to the provisional reservation made by Italy under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”) made at the time of signing the MLI with respect to Article 4 (Dual Resident Entities) of the MLI, or interpretations thereof and changes to applicable facts and circumstances (e.g., a change of board members or the place where board meetings take place), may have a bearing on the determination of our tax residency and the consequent tax treatment.

If the competent tax authorities of a jurisdiction other than Italy, including the Netherlands, take the position that we should be treated as (exclusively) tax resident of that jurisdiction for purposes of an applicable tax treaty, we would be subject to corporation tax and all distributions made by us to our shareholders would be subject to any applicable dividend withholding tax in such other jurisdiction(s) as well as in Italy. To resolve any dual tax residency issue, we may have access to a mutual agreement procedure and/or dispute resolution mechanisms under an applicable tax treaty and the dispute resolution mechanism under the EU Arbitration Directive (if it is an EU jurisdiction), or we could submit our case for judicial review by the relevant courts. These procedures would require substantial time, costs and efforts, and it is not certain that double taxation issues can be resolved in all circumstances.

If we pay dividends, we may need to withhold tax on such dividends payable to our shareholders in both Italy and the Netherlands.

As a result of the Conversion into a Dutch limited liability company (naamloze vennootschap), but with our place of effective management in Italy (and not in the Netherlands), our dividends are generally subject to Italian dividend withholding tax. However, Dutch dividend withholding tax, in addition to Italian withholding tax, will be required to be withheld from dividends if and when paid to Dutch resident shareholders (and non-Dutch resident shareholders that have a permanent establishment in the Netherlands to which their shareholding is attributable). We will be required to identify our shareholders in order to assess whether there are Dutch residents (or non-Dutch residents with a permanent establishment to which the shares are attributable) in respect of which Dutch dividend withholding tax has to be withheld. Such identification may not always be possible in practice. If the identity of our shareholders cannot be assessed upon a payment of dividend, withholding of both Italian and Dutch dividend withholding tax from such dividend may occur. Our non-Dutch resident shareholders may apply for a refund of Dutch dividend withholding tax, if withheld on the distribution. For further discussion, see “Material Tax Considerations Material Dutch Tax Considerations Dividend Withholding Tax.”

The consequences of the loyalty voting program are uncertain.

No statutory, judicial or administrative authority directly discusses how the receipt, ownership or disposition of Zegna Special Voting Shares under the Zegna loyalty voting program to be implemented in connection with the Business Combination should be treated for Italian or U.S. tax purposes and, as a result, the tax consequences in those jurisdictions are uncertain.

The fair market value of the Zegna Special Voting Shares, which may be relevant for tax purposes, is a factual determination and is not governed by any guidance that directly addresses such a situation. Because, among other things, the Zegna Special Voting Shares will not be transferable (other than, in very limited circumstances, together with the associated Ordinary Shares) and a shareholder will receive amounts in respect of the Zegna Special Voting Shares only if Zegna is liquidated, we expect to take the position that the fair market value of

 

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each Zegna Special Voting Share is minimal. However, the relevant tax authorities could assert that the value of the Zegna Special Voting Shares as determined by Zegna is incorrect.

The tax treatment of the loyalty voting program to be implemented in connection with the initial business combination is unclear and shareholders are urged to consult their tax advisors in respect of the consequences of acquiring, owning and disposing of Zegna Special Voting Shares. See “Material Tax ConsiderationsMaterial United States Federal Income Tax Considerations to U.S. HoldersLoyalty Voting Program and Zegna Special Voting Shares for further discussion.

We benefit or seek to benefit from certain special tax regimes, which may not be available in the future.

We currently calculate taxes due in Italy based, among other things, on certain tax incentives recognized by Italian tax regulations for research and development expenses. In the past we have received tax benefit for research and development expenses in 2017.

In addition, we benefit from the measures introduced in Italy by art. 110 of Law Decree no. 104/2020, converted into Law no. 126/2020, which re-opened the voluntary step-up of tangible assets, with the application of a 3% substitutive tax rate.

Furthermore, Italian Law no. 190/2014, as subsequently amended and supplemented, introduced an optional Patent Box regime in the Italian tax system. The Patent Box regime is a tax exemption related to, among others, the use of intellectual property assets. Business income derived from the use of each qualified intangible asset is partially exempted from taxation for both IRES and IRAP purposes. We have applied the Patent Box tax regime for the period from 2015 to 2019, in line with applicable tax regulations in Italy. The amount of the related tax benefits that the Group has received from the tax regime remains subject to limited uncertainty.

These measures continue to mitigate our tax burden in Italy. Significant changes in regulations or interpretation thereof might adversely affect the availability of such exemptions and result in higher tax charges, which may result in a material adverse effect on our business, results of operations and financial condition.

We are subject to risks related to the complexity and uncertainty in interpretation of transfer pricing rules.

We operate in about 80 countries worldwide with integrated industrial, commercial, stylist and communication functions, trademarks used in different jurisdictions and are subject to taxation in Italy and in other foreign countries in which our subsidiaries are located. Within Zegna, transactions between related parties located in different countries are carried out in the ordinary course of business and are mainly related to the purchase and sale of goods and the provision of services.

These transactions are subject to transfer pricing rules defined globally by the Organization for Economic and Co-operation and Development (“OECD”) and local tax laws. In this respect, our intercompany prices are set up consistently with the guidance provided by the OECD Transfer Pricing Guidelines and we and our subsidiaries prepare specific transfer pricing documentation with respect to such transactions.

Although we believe that our transfer pricing is correct, due to the complexity of these rules and the uncertainties in their interpretation, the tax authorities might challenge the prices of certain of our intercompany transactions and propose transfer pricing adjustments. Consequently, such adjustments may increase the related taxes and impose penalties and late payment interests, which may result in a material adverse effect on our business, results of operations and financial condition.

 

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Risk factors relating to holding our shares following the Business Combination

An active and liquid trading market for the Ordinary Shares may not develop, the market price may be volatile and investors may suffer a loss.

Prior to the Business Combination, there has been no public market for the shares of Zegna. We will apply to list the Ordinary Shares on the NYSE following the Business Combination, as required in connection with the Business Combination. However, there can be no assurance that an active and liquid trading market for the Ordinary Shares will be established or maintained. Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors. The actual market price of the Ordinary Shares may fluctuate because of several factors, including those described in this section “Risk Factors,” may not reflect our actual operating performance and may be lower than the price investors paid to purchase the Ordinary Shares.

Substantial sales of the Ordinary Shares and/or Zegna Warrants could cause the price of such securities to decline.

Following the Business Combination, the Zegna Shareholders, the IIAC Initial Shareholders and the FPA Purchaser will be subject to restrictions on share sales for certain periods of time, but will be free to sell once those restrictions expire. See “The Business Combination Agreement and Ancillary Documents—Lock-Up Agreements.” In addition, certain Insider PIPE Subscribers will be subject to restrictions in connection with the sale of the Ordinary Shares they will purchase in the PIPE Financing. The other shareholders, which will own the minority of Ordinary Shares following the Business Combination, will not subject to any resale restrictions. A sale of a significant number of Ordinary Shares or Zegna Warrants following the Business Combination, or the anticipation by the market of a possible sale, particularly sales of Ordinary Shares on the part of any of the shareholders subject to the lock-up, following expiration of the lock-up, could have the effect of depressing the market price for such securities.

The loyalty voting program may affect the liquidity of the Ordinary Shares and reduce share price.

The implementation of Zegna’s loyalty voting program could reduce the trading liquidity and adversely affect the trading prices of the Ordinary Shares. The loyalty voting program is intended to reward shareholders for maintaining long-term share ownership by granting persons holding Ordinary Shares continuously for at least two years the option to elect to receive Zegna Special Voting Shares. Zegna Special Voting Shares cannot be transferred (except in very limited circumstances) and, if Ordinary Shares participating in the loyalty voting program are transferred they must be deregistered from the Loyalty Register and any corresponding Zegna Special Voting Shares transferred to us for no consideration (om niet). This loyalty voting program is designed to encourage a stable shareholder base and, conversely, it may deter trading by shareholders that may be interested in participating in the loyalty voting program. Therefore, the loyalty voting program may reduce liquidity in Ordinary Shares and adversely affect their trading price.

Our majority shareholders will continue to exercise control over Zegna after the Business Combination, which will limit other shareholders’ ability to influence corporate matters and could delay or prevent a change in corporate control. The interests of our majority shareholders may differ from those of our other shareholders.

Following the Business Combination, we expect that Monterubello will hold 58.9% of the Ordinary Shares issued and outstanding in a no redemption scenario (or 65.4% in the maximum redemption scenario or 62.0% in the illustrative redemption scenario). Please see “Beneficial Ownership.” As a result, Monterubello will be able to influence our management and affairs and control the outcome of matters submitted to our shareholder meetings for approval, including the election of directors and any sale, merger, consolidation, or sale of all or substantially all of our assets. In addition, the loyalty voting program established by the Articles of Association of Zegna may make it more difficult for a third party to acquire, or attempt to acquire, control of Zegna, even if a change of control were considered favorably by shareholders holding a majority of Ordinary Shares. As a result

 

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of Monturubello’s ownership and the loyalty voting program, a relatively large proportion of the voting power in Zegna could be concentrated in a relatively small number of shareholders who would have significant influence over Zegna. Monterubello and other shareholders participating in the loyalty voting program may have the power effectively to prevent or delay change of control or other transactions that may otherwise benefit Zegna’s shareholders, which may also prevent or discourage shareholder initiatives aimed at changing Zegna’s management or strategy or otherwise exerting influence over Zegna. In addition, Monterubello will exercise its voting power in its own interest, which may not be in line or even be in conflict with the interests of the remaining shareholders.

Zegna will be a Dutch public company with limited liability, and its shareholders may have rights different to those of shareholders of companies organized in the United States.

The rights of the shareholders of Zegna may be different from the rights of shareholders of companies governed by the laws of U.S. jurisdictions. Following the Business Combination, Zegna will be a Dutch public company with limited liability (naamloze vennootschap). Its corporate affairs will be governed by the Zegna Articles of Association. The rights of Zegna’s shareholders and the responsibilities of members of its Board of Directors may be different from the rights of shareholders and the responsibilities of members of board of directors of companies governed by the laws of other jurisdictions including the United States. In the performance of its duties, the Zegna Board will be required by Dutch law to consider Zegna’s interests and the interests of its shareholders, employees and other stakeholders, in all cases with due observation of the principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different from, or in addition to, the interests of shareholders.

Zegna is expected to be a “foreign private issuer” under the rules and regulations of the SEC and, thus, to be exempt from a number of rules under the Exchange Act of 1934 and be permitted to file less information with the SEC than a company incorporated in the United States.

As a “foreign private issuer” Zegna will be exempt from rules under the Exchange Act, that impose certain disclosure and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of the Ordinary Shares. Moreover, Zegna will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, nor be required to comply with Regulation FD, which restricts the selective disclosure of material information. Accordingly, there may be less publicly available information concerning Zegna than there is for U.S. public companies.

Our financial projections may differ materially from actual results.

This proxy statement/prospectus contains certain financial projections that were provided to IIAC and Mediobanca. Such financial projections are based on our estimates and assumptions as of the dates on which they were prepared concerning various factors that are subject to significant risks and uncertainties, many of which are beyond our control, and therefore actual results may differ materially from such projections. Notably, our financial projections reflect estimates and assumptions, beyond our control, including but not limited to, the gradual recovery to pre-COVID conditions by 2023, particularly in the geographies where Zegna has a material presence, continuation of the trend towards luxury casualization and bottoming out of the decline in demand for formalwear, supported by a resilient demand for made-to-measure products. For further information, see “The Business Combination—Certain Unaudited Zegna Prospective Financial Information.” Accordingly, our future financial condition and results of operations may differ materially from our projections. Our failure to achieve our projected results could harm the trading price of Zegna’s securities and its financial position following the completion of the Business Combination. Neither Zegna nor IIAC have any duty to update the financial projections included in this proxy statement/prospectus.

 

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If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the NYSE. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In particular, Section 404 of the Sarbanes-Oxley Act (“Section 404”) will require us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting. We will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report on Form 20-F, which we expect to file in 2023 with respect to the fiscal year ending December 31, 2022. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition.

We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses, or if we are unable to develop and maintain an effective system of internal controls, we may not be able to produce timely and accurate financial statements or comply with applicable laws and regulations, which may adversely affect our business and the price of our securities.

In connection with the preparation of this proxy statement/prospectus, we have identified material weaknesses in the design and operating effectiveness of our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

We identified material weaknesses with respect to the Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), concerning in particular the: (i) control environment, because, as a private company, we did not have, among other things, a sufficient number of resources with appropriate competences in accounting and financial reporting for a SEC reporting company, appropriate oversight responsibilities, established structures, reporting lines and authorities, and accountability; (ii) risk assessment, as we did not design and implement an effective risk assessment to identify and communicate appropriate objectives and fraud, and to identify and assess changes in the business that could affect Zegna’s system of internal controls; (iii) information and communication, as we did not generate and provide quality information and communication necessary to support the functioning of internal control, including by providing information pursuant to objectives, responsibilities, and functions of internal control; (iv) monitoring activities, as we did not have the evidence to support evaluation of the effectiveness of monitoring controls to ascertain whether the components of internal control are present and functioning; and (v) control activities, as we did not design and implement effective control activities, including proper segregation of duties and general information technology controls, across substantially all financial statement account balances and disclosures.

As a consequence of these material weaknesses, accounting errors were identified in our annual consolidated financial statements primarily related to the application of accounting judgements on complex transactions

 

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concerning business combinations, impairment, fair value estimate, classification of financial instruments and classification of tax receivables and liabilities. The principal accounts concerned are goodwill, intangible assets, right of use, property, plant and equipment, inventories, other current financial assets, tax receivables and tax liabilities, cash and cash equivalents, derivative financial instruments, deferred taxes, depreciation, amortization and impairment of assets and financial income and expenses, which have been restated as included in this proxy statement/prospectus. These material weaknesses could result in a misstatement of our accounts or disclosures, which may result in a material misstatement in our annual or interim consolidated financial statements that would not be prevented or detected.

We are not currently required to make a formal assessment of the effectiveness of our internal control over financial reporting in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act. Following the Closing, beginning with our second annual report on Form 20-F filed with the SEC (which is expected to be the annual report for the year ending December 31, 2022) we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting and our independent registered public accounting firm will be required to attest to the effectiveness of our internal controls over financial reporting.

We are working to remediate the control deficiencies that led to these material weaknesses as quickly and efficiently as possible. The remediation measures that we are taking involve implementation of appropriate processes with the objective of improving the effectiveness of controls over financial reporting. In particular, we expect to engage an external advisor to assist with our design and execution of our Sarbanes-Oxley Act compliance program, including with respect to (i) performing our risk assessment and scoping to identify relevant controls that will be designed, implemented, and tested by management with the assistance of outside advisors, (ii) establishing compliant risk and control matrices for applicable processes across our markets, (iii) implementing a monitoring function, and (iv) designing or reassessing existing entity-level controls and general information technology controls and, as necessary, implementing enhancements to such controls.

We cannot assure you that the measures that we are planning to take will be sufficient to remediate the control deficiencies that led to these material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. In addition, neither our management nor an independent registered public accounting firm has performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act. Had we or our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses may have been identified.

If we are unable to remediate the material weaknesses we have identified, or if we identify additional material weaknesses in the future or otherwise fail to develop and maintain an effective system of internal controls, we may not be able to produce timely and accurate financial statements, which may subject us to adverse regulatory consequences and adversely affect investor confidence in us and, as a result, the price of our securities and our ability to access the capital markets in the future.

Zegna’s ability to pay dividends may be limited and the level of future dividends is subject to change.

Payment of dividends on Zegna’s shares in the future will be subject to business conditions, financial conditions, earnings, cash balances, commitments, strategic plans and other factors that the Board of Directors may deem relevant at the time it recommends approval of the dividend. Any dividend policy, once adopted, will be subject to change based on changes in statutory requirements, market trends, strategic developments, capital requirements and a number of other factors. In addition, under the Articles of Association and Dutch law, dividends may be declared on the Ordinary Shares only if the amount of equity exceeds the paid up and called up capital plus the reserves that have to be maintained pursuant to Dutch law or the Articles of Association. Further, even if Zegna is permitted under the Articles of Association and Dutch law to pay cash dividends on its shares, it may not have sufficient cash to pay dividends in cash on its shares. Zegna will be a holding company and its operations will be carried out through its subsidiaries. As a result, Zegna’s ability to pay dividends will primarily depend on the ability of its subsidiaries to generate earnings and to provide Zegna with the necessary financial resources.

 

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It may be difficult to enforce U.S. judgments against us.

Following the Business Combination, Zegna will be a company incorporated under the laws of the Netherlands, and a substantial portion of its assets will be outside of the United States. Most of Zegna’s directors and senior management and independent auditors will be resident outside the United States, and all or a substantial portion of their respective assets may be located outside the United States. As a result, it may be difficult for U.S. investors to effect service of process within the United States upon these persons. It may also be difficult for U.S. investors to enforce within the United States judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts outside the United States would recognize or enforce judgments of U.S. courts obtained against Zegna or its directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Therefore, it may be difficult to enforce U.S. judgments against Zegna, its directors and officers and independent auditors.

Risks Related to the Business Combination and IIAC

Throughout this section, unless otherwise indicated or the context otherwise requires, references in this section to “IIAC,” “we,” “us,” “our,” and other similar terms refer to IIAC and its subsidiaries prior to the Business Combination and to Zegna and its consolidated subsidiaries after giving effect to the Business Combination.

If the sale of the forward purchase shares does not close, we may lack sufficient funds to consummate the Business Combination.

In connection with the consummation of our initial public offering, IIAC entered into the Forward Purchase Agreement with the FPA Purchaser, an affiliate of the IIAC Sponsor, which provides for the purchase by such affiliate of up to $250,000,000 of forward purchase shares for a purchase price of $10.00 per share, in a private placement to occur concurrently with the closing of an initial business combination (provided that the holders of the forward purchase shares will not vote at the general meeting of the company seeking shareholders’ approval of the initial business combination). In connection with the Business Combination, IIAC entered into the FPA Amendment on July 26, 2021, under which the FPA Purchaser will purchase 22,500,000 forward purchase shares for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate). The proceeds from the sale of forward purchase shares, together with the amounts available to us from the Trust Account (after giving effect to any redemptions of public shares and the payment of deferred underwriting commissions) and any other equity or debt financing obtained by us in connection with the Business Combination, will be used to satisfy the cash requirements of the Business Combination, including funding the purchase price and paying expenses and retaining specified amounts to be used by the post-Business Combination company for working capital or other purposes. The Forward Purchase Agreement contains customary closing conditions, the fulfillment of which is a condition for the FPA Purchaser to purchase the forward purchase shares, including that our initial business combination must be consummated concurrently with the purchase of forward purchase shares. If the sale of the forward purchase shares does not close for any reason, including by reason of the failure by the FPA Purchaser to fund the purchase price for its forward purchase shares, we may lack sufficient funds to consummate the Business Combination and we may need to seek alternative financing. In the event of any such failure to fund, we may not be able to obtain additional funds to account for such shortfall on terms favorable to us or at all.

Exchange rate fluctuations and currency policies may cause the FPA Purchaser to pay for the forward purchase shares at a price per share lower than $10.00 per share.

In connection with the Business Combination, IIAC entered into the FPA Amendment on July 26, 2021, under which the FPA Purchaser will purchase 22,500,000 Class A Shares for an aggregate purchase price of

 

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€184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate). Pursuant to the FPA Amendment, if, at the closing of the Transactions, the effective issue price per Class A Share purchased in the Forward Purchase would be less than $9.65, then the purchase price for such Class A Shares will be increased to a Euro amount such that the effective issue price per share is equal to at least $9.65. The sale of shares under the Forward Purchase will be paid in Euros, and the dollar equivalent could be affected by fluctuations in the relevant currency exchange rate, which may be affected by, among other things, changes in political and economic conditions. If the Euro depreciates in value against the dollar prior to the consummation of the Business Combination, the FPA Purchaser may pay a price per share lower than $10.00.

The IIAC Sponsor and each of IIAC’s officers and directors agreed to vote in favor of our initial business combination, including the Business Combination in particular, as applicable, regardless of how IIAC’s public shareholders vote.

Unlike other blank check companies in which the founders agree to vote their founder shares and any public shares purchased by them during or after such company’s initial public offering in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the IIAC Sponsor and each of IIAC’s officers and directors have agreed, and their permitted transferees will agree, pursuant to the terms of letter agreements entered into with IIAC (including the Sponsor Letter Agreement entered into between the IIAC Sponsor, each of the Other Class B Shareholders, IIAC and Zegna with respect to the Business Combination), to vote any founder shares held by them, as well as any public shares owned by them, in favor of our initial business combination (including the Business Combination). As of the record date the IIAC Initial Shareholders owned 20% of the issued and outstanding ordinary shares, including all of the Founder Shares, and will be able to vote all of such shares at the General Meeting. Accordingly, it is more likely that the necessary shareholder approval will be received for the Business Combination than would be the case if the IIAC Sponsor and each of IIAC’s officers and directors agreed to vote any ordinary shares owned by them in accordance with the majority of the votes cast by IIAC’s public shareholders.

Since the IIAC Sponsor and our directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Zegna is appropriate as our initial business combination. Such interests include that the IIAC Sponsor and our directors and executive officers, will lose their entire investment in us if our business combination is not completed, and that the IIAC Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate IIAC.

When you consider the recommendation of the IIAC Board in favor of approval of the Business Combination Proposal, you should keep in mind that the IIAC Sponsor, our directors and our executive officers have interests in such proposal that are different from, or in addition to (which may conflict with), those of IIAC shareholders and warrant holders generally.

These interests include, among other things, the interests listed below:

 

   

the fact that the IIAC Sponsor and IIAC’s directors have agreed not to redeem any Class A Shares held by them in connection with a shareholder vote to approve a proposed initial business combination, including the Business Combination;

 

   

the fact that the IIAC Sponsor paid an aggregate of $25,000 for the 10,062,500 Founder Shares currently owned by the IIAC Sponsor and the Other Class B Shareholders and such securities will have a significantly higher value upon the consummation of the Business Combination;

 

   

the fact that 50% of the Ordinary Shares into which the Founder Shares will be exchanged will be held in escrow and will be released to the IIAC Initial Shareholders, pro rata, upon satisfaction of certain share price triggers. During the period that such Ordinary Shares are held in escrow, the IIAC Initial Shareholders will not be entitled to vote or receive dividends thereon;

 

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the fact that the IIAC Sponsor paid an aggregate of $10,050,000 for 6,700,000 warrants, each exercisable to purchase one Class A Share at $11.50 per share, subject to adjustment, and such warrants will expire as worthless if an initial business combination is not consummated by November 23, 2022;

 

   

the fact that Sponsor Group paid an aggregate of $235,575,000 for its investment in Zegna (including the FPA Purchaser’s investment in the PIPE Financing and the Forward Purchase), as summarized in the table below, and, following the consummation of the Business Combination, the aggregate value of the IIAC Sponsor’s investment will be $292,303,275 (excluding the Escrowed Shares), based upon the respective closing prices of the Class A Shares and the IIAC Public Warrants on the NYSE on October 28, 2021.

Sponsor Group Ownership of IIAC Prior to Closing

 

     Securities
held by
Sponsor
Group
     Sponsor Cost
at IIAC’s

initial public
offering ($)
 

Class A Shares

     —          —    

Founder Shares

     9,937,500      $ 25,000  

IIAC Private Placement Warrants

     6,700,000      $ 10,050,000  
     

 

 

 

Total

      $ 10,075,000  
     

 

 

 

Sponsor Group Ownership of Zegna Following the Closing

 

     Securities
held by
Sponsor
Group Prior
to Closing
    Value per
Security
($)
     Sponsor Group
Cost at Closing
($)
    Total Value ($)  

Ordinary Shares Issued Pursuant to the PIPE Financing

     620,000     $ 10.02      $ 6,200,000     $ 6,212,400  

Ordinary Shares Issued Pursuant to the Forward Purchase

     22,500,000     $ 10.02      $ 219,300,000 (1)    $ 225,450,000  

Ordinary Shares Issued to Holders of Founder Shares

     4,968,750 (2)    $ 10.02        —       $ 49,786,875  

Zegna Private Placement Warrants

     6,700,000     $ 1.62        —       $ 10,854,000  
       

 

 

   

 

 

 

Total

        $ 225,500,000     $ 292,303,275  
       

 

 

   

 

 

 

 

(1)

Under the Forward Purchase Agreement, the FPA Purchaser will purchase 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000, subject to adjustment in accordance with the terms of the Forward Purchase Agreement. The dollar amount listed in the chart is an approximate amount for illustrative purposes only and is based on the Balance Sheet Exchange Rate.

(2)

Excludes 4,968,750 Escrowed Shares which will be held in escrow until the satisfaction of the relevant release conditions or lapse of the prescribed period of time. As long as any such Escrowed Shares are held in escrow, the IIAC Sponsor’s voting and economic rights shall be restricted.

 

   

the fact that IIAC Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on IIAC’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. IIAC’s audit committee reviews on a quarterly basis all payments that were made to IIAC Sponsor, IIAC’s executive officers or directors, or IIAC’s or their affiliates. Any such payments prior to an initial business combination are made using funds held

 

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outside the Trust Account. Other than quarterly audit committee review of such reimbursements, IIAC does not have any additional controls in place governing IIAC’s reimbursement payments to IIAC’s directors and executive officers for their out-of-pocket expenses incurred in connection with IIAC’s activities on IIAC’s behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, is paid by IIAC to IIAC Sponsor, IIAC’s executive officers and directors, or any of their respective affiliates, prior to completion of its initial business combination. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by IIAC’s executive officers and directors and there are no outstanding out-of-pocket expenses for which IIAC’s executive officers or directors are awaiting reimbursement;

 

   

the fact that the IIAC Sponsor, the Other Class B Shareholders and IIAC’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if IIAC fails to complete an initial business combination by November 23, 2022;

 

   

the fact that the Shareholders Agreement will be entered into by, among others, the IIAC Sponsor, and the Registration Rights Agreement will be entered into by, among others, the IIAC Sponsor and the Other Class B Shareholders;

 

   

the fact that, pursuant to the Business Combination Agreement, the IIAC Sponsor will have certain governance rights in respect of Zegna that will be set forth in Zegna’s governing documents and in the Shareholders Agreement, as described in “Description of Zegna Securities—Board of Directors—Nomination and Appointment” and “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Shareholders Agreement.

 

   

the fact that the Business Combination Agreement provides that Andrea C. Bonomi, who is currently a member of IIAC’s advisory board, will be appointed as a member of the Zegna Board following the Closing. Mr. Bonomi is also Chairman of the Industrial Advisory Board of Investindustrial, and has or may have in the future direct or indirect investments and interests in the performance of Zegna, Investindustrial or their respective affiliates;

 

   

the fact that the Business Combination Agreement provides that Sergio P. Ermotti, who is currently an independent director and the chairman of the IIAC Board, owns 75,000 Class B Shares and has an ownership interest in the IIAC Sponsor (through which he has indirect ownership of additional Class B Shares and IIAC Private Placement Warrants to purchase Class A Shares), will be appointed as a member of the Zegna Board following the Closing and, in connection with the Closing, will receive a one-time grant of 100,000 Zegna Private Placement Warrants, subject to corporate approvals;

 

   

the right of the IIAC Sponsor and the Other Class B Shareholders to hold Ordinary Shares following the Business Combination, subject to the terms and conditions of the IIAC Sponsor Lock-Up Agreement;

 

   

the fact that the Business Combination Agreement provides for the continued indemnification of IIAC’s existing directors and officers and the members of IIAC’s advisory board and requires Zegna to purchase, at or prior to Closing, and maintain in effect for a period of six (6) years after the Closing Date, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain IIAC’s directors and officers after the Business Combination;

 

   

the fact that the IIAC 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;

 

   

the IIAC Sponsor and its affiliates can earn a positive rate of return on their investment, even if other IIAC shareholders experience a negative rate of return in the post-business combination company;

 

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the fact that the FPA Purchaser, an affiliate of the IIAC Sponsor, has entered into the Forward Purchase Agreement with IIAC and committed to purchase from IIAC up to 25,000,000 Class A Shares on the terms specified therein in connection with the Business Combination, which Forward Purchase Agreement was amended in connection with the Business Combination Agreement such that the FPA Purchaser committed to purchase from IIAC 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate), subject to adjustment in accordance with the terms of the Forward Purchase Agreement;

 

   

the fact that, in connection with the PIPE Financing, the FPA Purchaser and Sergio P. Ermotti, the chairman of the IIAC Board, will subscribe for 620,000 and 120,000 Ordinary Shares, respectively;

 

   

the fact that the IIAC Sponsor and IIAC’s officers and directors will lose their investment in IIAC and will not be reimbursed for any out-of-pocket expenses incurred by them on IIAC’s behalf incident to identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by November 23, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event IIAC is unable to complete an initial business combination within the required time period, the IIAC Sponsor has agreed to indemnify IIAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which IIAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to IIAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; and

 

   

the fact that, at the option of the IIAC Sponsor, any amounts outstanding under any loan made by the IIAC Sponsor or any of its Affiliates to IIAC in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A Shares in connection with the consummation of the Business Combination (provided that, pursuant to the Sponsor Letter Agreement, the IIAC Sponsor has agreed not to convert such loans into warrants without the consent of Zegna), and such amounts (including amounts due under the outstanding promissory notes) will likely be written off if an initial business combination is not consummated by November 23, 2022.

In addition, certain persons who are expected to become Zegna Directors after the completion of the Business Combination may have interests in the Business Combination that are different from, or in addition to, the interests of the IIAC shareholders. See “The Business Combination—Interests of Certain Persons in the Business Combination” for additional information.

The personal and financial interests of the IIAC Sponsor as well as IIAC’s directors and executive officers may have influenced their motivation in identifying and selecting Zegna as a business combination target, completing an initial business combination with Zegna and influencing the operation of the business following the initial business combination. In considering the recommendations of the IIAC Board to vote for the proposals, its shareholders should consider these interests. Additionally, following the Closing, the IIAC Sponsor will have the right to designate one member of the Zegna Board, who is initially expected to be Andrea C. Bonomi. Any vote made by such an individual appointed by the IIAC Sponsor as part of such individual’s service on the Zegna Board does not express the vote of IIAC or Investindustrial in any capacity, but solely such individual’s vote as a director of Zegna.

 

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The exercise of IIAC’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in IIAC’s shareholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Business Combination Agreement, would require IIAC to agree to amend the Business Combination Agreement, to consent to certain actions taken by Zegna or to waive rights that IIAC is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of Zegna’s business, a request by Zegna to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Zegna’s business and would entitle IIAC to terminate the Business Combination Agreement. In any of such circumstances, it would be at IIAC’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for IIAC and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, IIAC does not believe there will be any changes or waivers that IIAC’s directors and executive officers would be likely to make after shareholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further shareholder approval, IIAC intends to circulate a new or amended proxy statement/prospectus and resolicit IIAC’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Business Combination Proposal.

IIAC and Zegna will incur significant transaction and transition costs in connection with the Business Combination.

IIAC and Zegna have incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination. IIAC and Zegna may also incur unanticipated costs associated with the Business Combination, including costs driven by Zegna becoming a public company and the listing on the NYSE of the Ordinary Shares, and these unanticipated costs may have an adverse impact on the results of operations of Zegna following the effectiveness of the Business Combination. All expenses incurred in connection with the Business Combination Agreement and the transactions contemplated thereby, including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs. However, if the Closing occurs, then IIAC will pay, or cause to be paid, all of IIAC’s and Zegna’s expenses.

IIAC and Zegna cannot provide assurance that the benefits of the Business Combination will offset the incremental transaction costs in the near term, if at all.

A significant portion of the proceeds of the Business Combination and the transactions contemplated by the Business Combination Agreement will be used to fund the Share Repurchase.

In the Business Combination Agreement, Zegna and IIAC agreed that Zegna will acquire 54,600,000 Ordinary Shares from Monterubello, in exchange for €455 million of Cash Consideration. The Cash Consideration represents a significant portion of the proceeds of the Business Combination and the transactions contemplated by the Business Combination Agreement. Also as a result of the Share Repurchase, and depending on the level of redemptions by IIAC public shareholders, the additional cash on Zegna’s balance sheet following the Business Combination is expected to be approximately €220.2 million in a no redemption scenario or €7.7 million in a maximum redemption scenario. Zegna believes that, even after funding the Share Repurchase, its cash generation together with its available liquidity will be sufficient to meet its obligations and fund its business and capital expenditures for the foreseeable future.

 

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Goldman Sachs Italy, financial advisor to IIAC, may have had a potential conflict of interest in rendering services to IIAC in connection with the Business Combination.

Goldman Sachs Italy was engaged by IIAC as M&A financial advisor to IIAC. Goldman Sachs Italy provided M&A advice and assistance to IIAC in connection with its evaluation of the proposed Business Combination with Zegna and other potential business combination transactions, including advice related to the structuring and economic and other terms of the Business Combination and foreign exchange and hedging strategy, and will receive compensation in connection therewith. IIAC also engaged Goldman Sachs (an affiliate of Goldman Sachs Italy) to act as a placement agent on the PIPE Financing. Goldman Sachs will receive fees and expense reimbursements in connection therewith. In addition, Goldman Sachs was an underwriter on the initial public offering of IIAC and will receive a fee upon consummation of the Business Combination in connection therewith.

In addition, Goldman Sachs (together with its affiliates) is a full service financial institution engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investing, hedging, market making, brokerage and other financial and non-financial activities and services. From time to time, Goldman Sachs and its affiliates have provided various investment banking and other commercial dealings unrelated to the Business Combination or the PIPE Financing to Zegna and its affiliates, and IIAC and its affiliates, and has received customary compensation in connection therewith. In addition, Goldman Sachs and its affiliates may provide investment banking and other commercial dealings to IIAC, Zegna and their respective affiliates in the future, for which they would expect to receive customary compensation.

In addition, in the ordinary course of its business activities, Goldman Sachs and its affiliates, officers, directors and employees may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of IIAC or Zegna, or their respective affiliates. Goldman Sachs and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

The IIAC Board was aware of these interests and considered them in their determination to engage Goldman Sachs Italy as a financial advisor.

J.P. Morgan, financial advisor to IIAC, may have had a potential conflict of interest in rendering services to IIAC in connection with the Business Combination.

IIAC engaged J.P. Morgan as a financial advisor in connection with the Business Combination. J.P. Morgan has also acted as a placement agent for the PIPE Financing in connection with the Business Combination and will receive fees and expense reimbursements in connection therewith. The IIAC Board was aware of these interests and considered them in their determination to engage J.P. Morgan as a financial advisor.

Deutsche Bank, financial and capital markets advisor to IIAC, may have had a potential conflict of interest in rendering services to IIAC in connection with the Business Combination.

IIAC engaged Deutsche Bank as a financial and capital markets advisor in connection with the Business Combination. Deutsche Bank has also acted as a placement agent for the PIPE Financing in connection with the Business Combination and will receive fees and expense reimbursements in connection therewith. In addition, Deutsche Bank was an underwriter on the initial public offering of IIAC and will receive a fee upon consummation of the Business Combination in connection therewith. The IIAC Board was aware of these interests and considered them in their determination to engage Deutsche Bank as a financial and capital markets advisor.

 

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The Warrant Agreement designates (and, following the Closing, the New Warrant Agreement will designate) the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.

Our Warrant Agreement provides, and the New Warrant Agreement will provide, that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to such agreements, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our Warrant Agreement and New Warrant Agreement. If any action, the subject matter of which is within the scope the forum provisions of the Warrant Agreement or the New Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our Warrant Agreement or New Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

The Business Combination Agreement requires us to meet the Aggregate Transaction Proceeds Condition at Closing. We do not know how many shareholders will ultimately exercise their redemption rights in connection with the Business Combination. As such, the Business Combination is structured based on our expectations (and those of the other parties to the Business Combination Agreement) as to the number of shares that will be submitted for redemption. In the event that our public shareholders exercise redemption rights with respect to a number of our shares such that the Aggregate Transaction Proceeds Condition is not met, we may need to seek to arrange for additional third party financing to be able to satisfy the Aggregate Transaction Proceeds Condition (or such lower amount designated by Zegna if Zegna waives the condition). Furthermore, raising such additional financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.

If too many of our public shareholders elect to redeem their shares and additional third-party financing is not available to us, there is an increased probability that our initial business combination would be unsuccessful. If the Business Combination is unsuccessful, you would not receive your pro rata portion of the funds in the Trust Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell

 

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your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights of our public shares until we liquidate or you are able to sell your shares in the open market.

For information on the consequences if the Business Combination is not completed or must be restructured, please see the section of this proxy statement/prospectus entitled “Risk Factors—Risks Related to the Business Combination and IIAC.

During the pendency of the Business Combination, Zegna will not be able to enter into a business combination with another party because of restrictions in the Business Combination Agreement. Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement.

Certain covenants in the Business Combination Agreement impede our ability to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Business Combination. As a result, we may be at a disadvantage to our competitors during that period. In addition, while the Business Combination Agreement is in effect, neither we nor Zegna may solicit, initiate, knowingly induce, knowingly encourage, knowingly facilitate, discuss or negotiate, directly or indirectly, any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination, with any third party, even though any such alternative acquisition could be more favorable to our shareholders than the Business Combination. In addition, if the Business Combination is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Business Combination Agreement due to the passage of time during which these provisions have remained in effect.

During the pendency of the Business Combination, Zegna and IIAC are prohibited from entering into certain transactions that might otherwise be beneficial to Zegna, IIAC or their respective shareholders.

Until the earlier of consummation of the Business Combination or termination of the Business Combination Agreement, Zegna and IIAC are subject to certain limitations on the operations of their businesses, each as summarized under the “The Business Combination Agreement and Ancillary Documents—Covenants of the Parties.” The limitations on Zegna’s and IIAC’s conduct of their businesses during this period could have the effect of delaying or preventing other strategic transactions and may, in some cases, make it impossible to pursue business opportunities that are available only for a limited time.

Uncertainties about the Business Combination during the pre-Closing period may cause third parties to delay or defer decisions concerning Zegna or seek to change existing arrangements.

There may be uncertainty regarding whether the Business Combination will occur. This uncertainty may cause third parties to delay or defer decisions concerning Zegna, which could negatively affect Zegna’s business. Third parties may seek to change existing agreements with Zegna as a result of the Business Combination for these or other reasons.

The announcement and pendency of the Business Combination could adversely affect Zegna’s business, cash flows, financial condition or results of operations.

The announcement and pendency of the Business Combination could cause disruptions in and create uncertainty surrounding Zegna’s business, including with respect to Zegna’s relationships with existing and future customers, suppliers and employees, which could have an adverse effect on Zegna’s business, cash flows, financial condition or results of operations, irrespective of whether the Business Combination is completed. The business relationships of Zegna may be subject to disruption as customers, suppliers and other persons with

 

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whom Zegna has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships or consider entering into business relationships with other parties. The risk, and adverse effect, of any such disruptions could be exacerbated by a delay in the consummation of the Business Combination.

The consummation of the Business Combination may trigger provisions in certain agreements to which Zegna is a party.

Zegna is a party to joint ventures, license agreements, financing and other agreements and instruments, some of which contain provisions that may be triggered by the Business Combination, such as change of control provisions, default provisions, termination provisions and/or acceleration provisions. The counterparties to such agreements may request contractual modifications and/or financial compensation as a condition to granting a waiver or consent under those agreements, and we and Zegna cannot provide assurance that such counterparties will not exercise their rights under the provisions included in such agreements that are triggered by any of the transactions contemplated by the Business Combination Agreement, including termination rights where available. If Zegna is unable to obtain any necessary waiver or consent, the operation of such provisions may cause the loss of contractual rights and benefits, the termination of the relevant agreements or may require the renegotiation of financing agreements, the repayment of indebtedness and/or the payment of fees.

If the conditions to the Business Combination Agreement are not met, the Business Combination may not occur.

Even if the Business Combination Agreement is approved by our shareholders, specified conditions must be satisfied or waived before the parties to the Business Combination Agreement are obligated to complete the Business Combination. For a list of the material closing conditions contained in the Business Combination Agreement, see the section entitled “The Business Combination—Conditions to Closing of the Business Combination.” We and Zegna may not satisfy all of the Closing conditions in the Business Combination Agreement. If the Closing conditions are not satisfied or waived, the Business Combination will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause us and Zegna to each lose some or all of the intended benefits of the Business Combination.

The ability of IIAC and Zegna to consummate the Business Combination, and the operations of Zegna following the Business Combination, may be materially adversely affected by developments in the COVID-19 pandemic.

The COVID-19 pandemic has resulted, and other infectious diseases could result, in a widespread health crisis that has affected and could continue to adversely affect the economies and financial markets worldwide, which may delay or prevent the consummation of the Business Combination, and the business of Zegna following the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. See also “We are subject to risks related to the COVID-19 pandemic or similar public health crises that may materially and adversely affect our business.”

IIAC will be required to consummate the Business Combination even if Zegna, its business, financial condition and results of operations are materially affected by COVID-19 (provided, however, the impact of the COVID-19 pandemic may be taken into account in determining whether a Zegna Material Adverse Effect has occurred or is reasonably likely to occur to the extent the COVID-19 pandemic has or would reasonably be likely to have a disproportionate adverse effect on Zegna and its subsidiaries, taken as a whole, relative to other participants operating in the industries or markets in which Zegna and its subsidiaries operate).

 

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If the Business Combination is not completed, potential target businesses may have leverage over us in negotiating a business combination and our ability to conduct due diligence on a business combination as we approach our dissolution deadline may decrease, which could undermine our ability to complete a business combination on terms that would produce value for our shareholders.

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete an initial business combination by November 23, 2022. Consequently, if we are unable to complete this Business Combination, a potential target may obtain leverage over us in negotiating a business combination, knowing that we may be unable to complete a business combination with another target business by November 23, 2022. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into a business combination on terms that we would have rejected upon a more comprehensive investigation.

The IIAC Sponsor, as well as Zegna, and their respective directors, officers, advisors or affiliates may elect to purchase shares or warrants from public shareholders, which may influence a vote on the Business Combination and reduce the public “float” of our securities.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities, the IIAC Sponsor, as well as Zegna, and their respective directors, officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market. There is no limit on the number of securities the IIAC Sponsor, as well as Zegna, and their respective directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law, NYSE rules and their own governance and legal restrictions. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), the IIAC Sponsor, as well as Zegna, directors, officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. The purpose of such share purchases and other transactions could be to (i) increase the likelihood of satisfaction of the requirements that: (a) the Business Combination Proposal is approved by the affirmative vote of the holders of at least a majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting; and (b) the Merger Proposal is approved by the affirmative vote of the holders of at least two-thirds of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting; and (ii) otherwise limit the number of public shares electing to redeem, also in order to ensure that the Aggregate Transaction Proceeds Condition is satisfied and that IIAC’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) are at least $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement, the PIPE Financing and the redemptions of Class A Shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the Trust Account will be used to purchase public shares or warrants in such transactions. Such purchases may include a contractual acknowledgment that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

In the event that the IIAC Sponsor, as well as Zegna, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. The purpose of any such transactions with respect to shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining shareholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants

 

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could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such transactions may result in the completion of our initial business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our Class A Shares or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain the quotation, listing or trading of our securities on a national securities exchange.

If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed.

We will comply with the proxy rules when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy materials such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy materials that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their share certificates to our Transfer Agent, or to deliver their shares to our Transfer Agent electronically prior to the date set forth in the proxy materials. In the case of proxy materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption of its public shares to also submit a written request for redemption to our Transfer Agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these or any other procedures disclosed in the proxy materials as applicable, its shares may not be redeemed.

If you or a “group” of shareholders of which you are a part are deemed to hold an aggregate of more than 15% of the public shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the public shares.

A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act) will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the public shares (the “Excess Shares”). In order to determine whether a shareholder is acting in concert or as a group with another shareholder, IIAC will require each public shareholder seeking to exercise redemption rights to certify to IIAC whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to share ownership available to IIAC at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which IIAC makes the above-referenced determination. Your inability to redeem any such Excess Shares will reduce your influence over IIAC’s ability to consummate the Business Combination and you could suffer a material loss on your investment in IIAC if you sell such Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such Excess Shares if IIAC consummates the Business Combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the public shares and, in order to dispose of such Excess Shares, would be required to sell your stock in open market transactions, potentially at a loss. IIAC cannot assure you that the value of such Excess Shares will appreciate over time following the Business Combination or that the market price of the public shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders may challenge IIAC’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

 

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However, IIAC’s shareholders’ ability to vote all of their shares (including such Excess Shares) for or against the Business Combination is not restricted by this limitation on redemption.

Because of our limited resources and the significant competition for business combination opportunities, if the Business Combination is not completed, it may be more difficult for us to complete an initial business combination. If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.

We have encountered and expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial resources are relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire, should the Business Combination fail, with the net proceeds of our initial public offering, over-allotment, and the sale of the IIAC Private Placement Warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable is limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not completed our initial business combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price in our initial public offering).

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the company under the circumstances.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any

 

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negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares, if we have not completed our initial business combination within the required time period, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to our registration statement, the IIAC Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked the IIAC Sponsor to reserve for such indemnification obligations, nor have we independently verified whether the IIAC Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that the IIAC Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that the IIAC Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us that is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the Trust Account, we may not be able to return to our public shareholders $10.00 per share (which was the offering price in our initial public offering).

Our directors may decide not to enforce the indemnification obligations of the IIAC Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and the IIAC Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the IIAC Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against the IIAC Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.00 per share.

 

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You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer Class A Shares (if exercised prior to the Closing) or Ordinary Shares (if exercised following the Closing) from such exercise than if you were to exercise such warrants for cash.

The Warrant Agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Class A Shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the Warrant Agreement; (ii) if we have so elected and the Class A Shares or Ordinary Shares, as applicable, are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of  “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering all of the warrants for that number of Class A Shares (if exercised prior to the Closing) or Ordinary Shares (if exercised following the Closing) equal to the quotient obtained by dividing (x) the product of the number of Class A Shares (if exercised prior to the Closing) or Ordinary Shares (if exercised following the Closing) underlying the warrants, multiplied by the excess of the “fair market value” (as defined in the next sentence) of our Class A Shares (if exercised prior to the Closing) or Ordinary Shares (if exercised following the Closing) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported last sale price of the Class A Shares (if exercised prior to the Closing) or Ordinary Shares (if exercised following the Closing) for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer shares of Class A Shares (if exercised prior to the Closing) or Ordinary Shares (if exercised following the Closing) from such exercise than if you were to exercise such warrants for cash. The New Warrant Agreement will contain the same terms and conditions with respect to any warrants governed thereby that are not then held by the IIAC Sponsor or its permitted transferees.

IIAC is an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if IIAC takes advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make IIAC’s securities less attractive to investors and may make it more difficult to compare IIAC’s performance with other public companies.

IIAC is an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in IIAC’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, IIAC’s shareholders may not have access to certain information they may deem important. IIAC could be an emerging growth company for up to five years, although circumstances could cause IIAC to lose that status earlier, including if the market value of Class A Shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case IIAC would no longer be an emerging growth company as of the following fiscal year end. We cannot predict whether investors will find IIAC securities less attractive because IIAC relies on these exemptions. If some investors find IIAC’s securities less attractive as a result of its reliance on these exemptions, the trading prices of IIAC’s securities may be lower than they otherwise would be, there may be a less active trading market for IIAC’s securities and the trading prices of IIAC’s securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act

 

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provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. IIAC has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, IIAC, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of IIAC’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, IIAC is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. IIAC will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of IIAC’s ordinary shares held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) IIAC’s annual revenue exceeded $100 million during such completed fiscal year and the market value of IIAC’s ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent IIAC takes advantage of such reduced disclosure obligations, it may also make comparison of IIAC’s financial statements with other public companies difficult or impossible.

We expect that, following the Business Combination, Zegna will not qualify as an emerging growth company or a smaller reporting company.

The price of the Ordinary Shares and Zegna’s warrants may be volatile.

Upon consummation of the Business Combination, the price of Ordinary Shares and Zegna warrants may fluctuate due to a variety of factors, including:

 

   

changes in the industries in which Zegna and its customers operate;

 

   

variations in its operating performance and the performance of its competitors in general;

 

   

material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

 

   

actual or anticipated fluctuations in Zegna’s annual or interim operating results;

 

   

publication of research reports by securities analysts about Zegna or its competitors or its industry;

 

   

the public’s reaction to Zegna’s press releases, its other public announcements and its filings with the SEC;

 

   

Zegna’s failure or the failure of its competitors to meet analysts’ projections or guidance that Zegna or its competitors may give to the market;

 

   

additions and departures of key personnel;

 

   

changes in laws and regulations affecting its business;

 

   

commencement of, or involvement in, litigation involving Zegna;

 

   

changes in Zegna’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of Ordinary Shares available for public sale;

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism; and

 

   

the other factors described in this “Risk Factors” section.

 

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These market and industry factors may materially reduce the market price of Ordinary Shares and Zegna warrants regardless of the operating performance of Zegna.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of Ordinary Shares to drop significantly, even if Zegna’s business is doing well.

Sales of a substantial number of Ordinary Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Ordinary Shares.

We may be required to file one or more registration statements prior to or shortly after the Closing to provide for the resale of certain restricted shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of Ordinary Shares could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

The public shareholders will experience immediate dilution as a consequence of the issuance of Ordinary Shares as consideration in the Business Combination and in the PIPE Financing.

In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things (i) the FPA Purchaser will purchase from IIAC and IIAC shall issue to such purchaser 22,500,000 Class A Shares (which will be exchanged for Ordinary Shares in connection with the Merger) for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate), subject to adjustment, and (ii) in connection with the PIPE Financing, the PIPE Investors will purchase from Zegna, and Zegna shall issue to such investors 25,000,000 Ordinary Shares.

The issuance of additional Class A Shares prior to the Closing or Ordinary Shares at the Closing will significantly dilute the equity interests of existing holders of our securities, and may adversely affect prevailing market prices for the Ordinary Shares and/or the Zegna Public Warrants.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements, including with the law of the jurisdiction of our incorporation. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the Trust Account prior to addressing

 

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the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of $18,292.68 and to imprisonment for five years in the Cayman Islands.

Risks for any holders of IIAC Public Warrants following the Business Combination

Following the Business Combination, Zegna may redeem your Zegna Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby significantly impairing the value of such warrants. Zegna will have the ability to redeem outstanding Zegna Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which a notice of redemption is sent to the warrantholders. Zegna will not redeem the warrants as described above unless a registration statement under the Securities Act covering the Ordinary Shares issuable upon exercise of such warrants is effective and a current prospectus relating to those Ordinary Shares is available throughout the 30-day redemption period. If and when the Zegna Public Warrants become redeemable by Zegna, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Zegna Public Warrants could force you (i) to exercise your Zegna Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Zegna Public Warrants at the then-current market price when you might otherwise wish to hold your Zegna Public Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding Zegna Public Warrants are called for redemption, is likely to be substantially less than the market value of your Zegna Public Warrants.

In addition, Zegna will have the ability to redeem the outstanding Zegna Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the closing price of the Ordinary Shares equals or exceeds $10.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on the trading day prior to the date on which a notice of redemption is sent to the warrant holders. In such a case, the holders will be able to exercise their Zegna Public Warrants prior to redemption for a number of Ordinary Shares determined based on a table in which the number of Ordinary Shares is based on the redemption date and the fair market value of the Ordinary Shares. Recent trading prices for the Class A Shares have not exceeded the $10.00 per share threshold at which the Zegna Public Warrants would become redeemable. Please see the notes to IIAC’s financial statements included elsewhere in this proxy statement/prospectus.

The value received upon exercise of the Zegna Public Warrants (1) may be less than the value the holders would have received if they had exercised their Zegna Public Warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the Zegna Public Warrants.

If the Aggregate Transaction Proceeds Condition is waived, we do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our shareholders do not agree.

Our amended and restated memorandum and articles of association provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 to avoid becoming subject to the SEC’s penny stock rules.

As a result, we may be able to complete our initial business combination even if a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder

 

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approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to the IIAC Sponsor, officers, directors, advisors or any of their affiliates. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the General Meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A Shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send notice of such redemption to the warrants holders and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.

In addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant, provided that the closing price of our Class A Shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30-trading day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to exercise their warrants prior to redemption for a number of Class A Shares determined based on the redemption date and the fair market value of our Class A Shares. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 Class A Shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants.

The NYSE may not list Zegna’s securities on its exchange, which could limit investors’ ability to make transactions in Zegna’s securities and subject Zegna to additional trading restrictions.

Zegna intends to apply to have its securities listed on the NYSE upon consummation of the Business Combination. Zegna will be required to demonstrate compliance with the NYSE’s listing requirements. We cannot assure you that Zegna will be able to meet all listing requirements. Even if Zegna’s securities are listed on the NYSE, Zegna may be unable to maintain the listing of its securities in the future.

If Zegna fails to meet the listing requirements and the NYSE does not list its securities on its exchange, Zegna and IIAC would not be required to consummate the Business Combination. In the event that Zegna elected to waive this condition, and the Business Combination was consummated without Zegna’s securities being listed on the NYSE or on another national securities exchange, Zegna could face significant material adverse consequences, including:

 

 

a limited availability of market quotations for Zegna’s securities;

 

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reduced liquidity for Zegna’s securities;

 

 

a determination that the Ordinary Shares are a “penny stock” which will require brokers trading in the Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for Zegna’s securities;

 

 

a limited amount of news and analyst coverage; and

 

 

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.”

If Zegna’s securities were not listed on the NYSE, such securities would not qualify as covered securities and Zegna would be subject to regulation in each state in which it offers its securities because states are not preempted from regulating the sale of securities that are not covered securities.

A market for Zegna’s securities may not develop, which would adversely affect the liquidity and price of Zegna’s securities.

An active trading market for Zegna’s securities following the Business Combination may never develop or, if developed, it may not be sustained. You may be unable to sell your Ordinary Shares unless a market can be established and sustained. This risk will be exacerbated if there is a high level of redemptions of our public shares in connection with the Closing.

Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our shares.

Securities research analysts may establish and publish their own periodic projections for Zegna following consummation of the Business Combination. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. While we expect research analyst coverage following consummation of the Business Combination, if no analysts commence coverage of us, the market price and volume for our common stock could be adversely affected.

Because Zegna will become a publicly-traded company through the Business Combination rather than an underwritten initial public offering, the scope of due diligence conducted may be different than that conducted by an underwriter in an underwritten initial public offering.

In an underwritten initial public offering, underwriters typically conduct due diligence on the company being taken public in order to establish a due diligence defense against liability claims under federal securities laws. Because IIAC is already a publicly-traded company, an underwriter has not been engaged. SPAC sponsors have an inherent conflict as their interests are worthless absent a business combination. While private investors and management in a business combination undertake a certain level of due diligence, it is not necessarily the same level of due diligence undertaken by an underwriter in a traditional initial public offering and, therefore, there could be a heightened risk of an incorrect valuation of the business or material misstatements or omissions in this proxy statement/prospectus.

 

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Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.

The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies. Zegna is not a publicly reporting company required to comply with Section 404 of the Sarbanes-Oxley Act and Zegna management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to Zegna after the Business Combination. If IIAC is not able to implement the requirements of Section 404, including any additional requirements once IIAC is no longer an emerging growth company, in a timely manner or with adequate compliance, IIAC may not be able to assess whether its internal control over financial reporting are effective, which may subject IIAC to adverse regulatory consequences and could harm investor confidence and the market price of IIAC’s securities. Additionally, once IIAC is no longer an emerging growth company, IIAC will be required to comply with the independent registered public accounting firm attestation requirement on IIAC’s internal control over financial reporting. We expect that, following the Business Combination, Zegna will not qualify as an emerging growth company or a smaller reporting company.

The IIAC Warrants are accounted for as liabilities and the changes in value of the IIAC Warrants could have a material effect on our financial results.

On April 12, 2021, the staff of the SEC (the “SEC Staff”) issued a public statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). Specifically, the SEC Staff Statement focused on warrants that have certain settlement terms and provisions related to certain tender offers or warrants which do not meet the criteria to be considered indexed to an entity’s own stock, which terms are similar to those contained in the Warrant Agreement governing our Warrants. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 13,416,667 IIAC Public Warrants and 6,700,000 IIAC Private Placement Warrants, and determined that the IIAC Warrants should be reclassified as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

As a result, included on our condensed balance sheet as of September 30, 2021 contained elsewhere in this proxy statement/prospectus are derivative liabilities related to embedded features contained within our Warrants. FASB ASC 815-40, “Derivatives and Hedging—Contracts on an Entity’s Own Equity,” provides for the remeasurement of the fair value of such liabilities at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the IIAC Warrants (and, following the Closing, the Zegna Warrants) each reporting period and that the amount of such gains or losses could be material.

IIAC has identified a material weakness in IIAC’s internal control over financial reporting. This material weakness could continue to adversely affect IIAC’s ability to report IIAC’s results of operations and financial condition accurately and in a timely manner.

IIAC has identified a material weakness in IIAC’s internal control over financial reporting related to the accounting of complex financial instruments, including for warrants IIAC issued in connection with its initial public offering in November 2020, notwithstanding the advice on the specific matter also obtained from professional third parties.

Additionally, IIAC’s management re-evaluated the application of ASC 480-10-S99-3A to IIAC’s accounting classification of public shares. IIAC’s management and audit committee concluded that it was appropriate to

 

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restate previously issued financial statements for IIAC, to classify all Class A ordinary shares subject to possible redemption in temporary equity.

Also, IIAC’s management determined there was an error in not recognizing the Deal-Contingent Forward in the IIAC’s unaudited interim financial statements included in their Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 15, 2021. Their management and audit committee concluded that the Deal-Contingent Forward should have been recognized on the balance sheet at fair value with changes in fair value recognized within the statement of operations.

As a result, IIAC’s management concluded that their internal control over financial reporting was not effective as of December 31, 2020. This material weakness resulted in a material misstatement of their warrant liabilities, change in fair value of warrant liabilities, additional paid-in capital, accumulated deficit, change in the reclassification of public shares, recognization of fair value of the Deal-Contingent Forward on the balance sheet and recognization of fair value within the statement of operations and related financial disclosures for IIAC’s previously issued (i) audited balance sheet related to its IPO, dated November 23, 2020 as filed on Form 8-K on November 30, 2020, (ii) unaudited pro forma balance sheet, dated November 27, 2020 as filed on Form 8-K on November 30, 2020, (iii) audited financial statements as of December 31, 2020 and for the period from September 7, 2020 (inception) through December 31, 2020 as filed on Form 10-K/A on May 27, 2021, (iv) unaudited interim financial statements as filed on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 1, 2021, (v) unaudited interim financial statements as filed on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021, and (vi) unaudited interim financial statements as filed on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 15, 2021.

IIAC’s management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. IIAC’s management is likewise required, on a quarterly basis, to evaluate the effectiveness of IIAC’s internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of their annual or interim financial statements will not be prevented or detected on a timely basis.

IIAC will continue to devote significant effort and resources to the remediation and improvement of its internal control over financial reporting. While IIAC has processes to identify and appropriately apply applicable accounting requirements, IIAC plans to further enhance these processes to better evaluate their research and understanding of the nuances of the complex accounting standards that apply to IIAC’s consolidated financial statements. IIAC plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among its personnel and third-party professionals with whom IIAC consults regarding complex accounting issues. The elements of IIAC’s remediation plan can only be accomplished over time, and IIAC can offer no assurance that these initiatives will ultimately have the intended effects.

Any failure to maintain such internal control could adversely impact IIAC’s ability to report its financial position and results from operations on a timely and accurate basis. If IIAC’s financial statements are not accurate, investors may not have a complete understanding of IIAC’s operations. Likewise, if IIAC’s financial statements are not filed on a timely basis, IIAC could be subject to sanctions or investigations by the stock exchange on which IIAC’s ordinary shares is listed, the SEC or other regulatory authorities. In either case, there could result a material adverse effect on IIAC’s business. Failure to timely file will cause IIAC to be ineligible to utilize short form registration statements on Form S-3, which may impair IIAC’s ability to obtain capital in a timely fashion to execute their business strategies or issue shares to effect an acquisition. Ineffective internal controls could also cause investors to lose confidence in IIAC’s reported financial information, which could have a negative effect on the trading price of IIAC’s stock.

 

 

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IIAC can give no assurance that the measures IIAC has taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if IIAC is successful in strengthening its controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of IIAC’s consolidated financial statements.

For the period from September 7, 2020 (inception) through December 31, 2020, IIAC’s independent registered public accounting firm has included an explanatory paragraph relating to IIAC’s ability to continue as a going concern in its report on IIAC’s audited financial statements.

The report from IIAC’s independent registered public accounting firm for the period from September 7, 2020 (inception) through December 31, 2020 includes an explanatory paragraph stating that the liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about their ability to continue as a going concern. IIAC’s consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. If a business combination is not consummated and IIAC is not able to obtain sufficient funding, IIAC’s business, prospects, financial condition and results of operations will be harmed and IIAC may be unable to continue as a going concern. If IIAC is unable to continue as a going concern, IIAC may have to liquidate its assets and may receive less than the value at which those assets are carried on their audited financial statements, and it is likely that investors would lose part or all of their investment. Future reports from IIAC’s independent registered public accounting firm may also contain statements expressing substantial doubt about its ability to continue as a going concern. If there remains substantial doubt about IIAC’s ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to them on commercially reasonable terms, or at all, and IIAC’s business may be harmed.

IIAC may face litigation and other risks as a result of the material weakness in its internal control over financial reporting related to the accounting of complex financial instruments.

IIAC’s management and audit committee concluded that it was appropriate to restate its previously issued financial statements for IIAC’s previously issued (i) audited balance sheet related to its IPO, dated November 23, 2020 as filed on Form 8-K on November 30, 2020, (ii) its unaudited pro forma balance sheet, dated November 27, 2020 as filed on Form 8-K on November 30, 2020, (iii) audited financial statements as of December 31, 2020 and for the period from September 7, 2020 (inception) through December 31, 2020 as filed on Form 10-K/A on May 27, 2021 (iv) unaudited interim financial statements as filed on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 1, 2021, (v) unaudited interim financial statements as filed on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021, and (vi) unaudited interim financial statements as filed on Form 10-Q for the quarterly period ended September 30, 2021, filed with the SEC on November 15, 2021. As part of the restatement, IIAC identified a material weakness in their internal controls over financial reporting.

As a result of such material weakness, the restatement, the change in accounting for the warrants, the change in the reclassification of the change in classification of IIAC’s Class A ordinary shares subject to possible redemption, and other matters raised or that may in the future be raised by the SEC, IIAC faces potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weakness in IIAC’s internal control over financial reporting and the preparation of IIAC’s financial statements. As of the date of this proxy statement/prospectus, IIAC has no knowledge of any such litigation or dispute. However, IIAC can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on IIAC’s business, results of operations and financial condition or IIAC’s ability to complete a business combination.

 

 

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Risks if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, the IIAC Board will not have the ability to adjourn the General Meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated.

The IIAC Board is seeking approval to adjourn the General Meeting to a later date or dates if, at the General Meeting, based upon the tabulated votes, there are insufficient votes to approve each of the Condition Precedent Proposals. If the Adjournment Proposal is not approved, the IIAC Board will not have the ability to adjourn the General Meeting to a later date and, therefore, will not have more time to solicit votes to approve the Condition Precedent Proposals. In such events, the Business Combination may not be completed. 

 

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PRICE RANGE OF SECURITIES AND DIVIDENDS

IIAC

IIAC Public Units, Class A Shares and IIAC Public Warrants are currently listed on the NYSE under the symbols “IIAC.U,” “IIAC” and “IIAC WS,” respectively. The IIAC Public Units will automatically separate into their component securities upon consummation of the Business Combination and, as a result, will no longer trade as an independent security. Upon the Closing, Ordinary Shares and Zegna Public Warrants will be listed on NYSE under the symbols “ZGN” and “ZGN WS,” respectively.

The closing price of the IIAC Public Units, Class A Shares and IIAC Public Warrants on July 16, 2021, the last trading day before announcement of the execution of the Business Combination Agreement, was $10.55, $10.18 and $1.05, respectively.

Holders of the IIAC Public Units, Class A Shares and IIAC Public Warrants should obtain current market quotations for their securities. The market price of IIAC’s securities could vary at any time before the Business Combination.

Holders

As of the date of this proxy statement/prospectus there was one holder of record of IIAC Public Units, one holder of record of Class A Shares, four holders of record of Class B Shares and two holders of record of IIAC Public Warrants (one of whom was a public holder). The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose IIAC Public Units, Class A Shares and IIAC Public Warrants are held of record by banks, brokers and other financial institutions.

Dividends

IIAC has not paid any cash dividends on the IIAC Ordinary Shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination. Assuming the Business Combination is consummated, the payment of cash dividends in the future will be dependent, among other things, upon Zegna’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination, as well as compliance with the Zegna Articles of Association and Dutch law. The payment of any dividends following the Conversion will be subject to the relevant provisions of the Zegna Articles of Association. See also “Description of Zegna Securities—Dividends and Other Distributions.” The ability of Zegna to declare dividends may also be limited by the terms of financing or other agreements entered into by Zegna from time to time.

Zegna

Historical market price information for Ordinary Shares is not provided because there is no public market for Ordinary Shares. See “Zegna’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

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GENERAL MEETING OF IIAC SHAREHOLDERS

IIAC is furnishing this proxy statement/prospectus to IIAC shareholders as part of the solicitation of proxies by the IIAC Board for use at the General Meeting of IIAC Shareholders to be held on December 15, 2021, and at any adjournment or postponement thereof. This proxy statement/prospectus contains important information regarding the General Meeting, the proposals on which you are being asked to vote and information you may find useful in determining how to vote and voting procedures.

This proxy statement/prospectus is being first mailed on or about November 29, 2021 to all shareholders of record of IIAC as of November 5, 2021, the record date for the General Meeting. All shareholders of record who owned IIAC Ordinary Shares at the close of business on the record date are entitled to receive notice of, attend and vote at the General Meeting. On the record date, there were 50,312,500 IIAC Ordinary Shares outstanding, of which 40,250,000 are public shares and 10,062,500 are Founder Shares held by the IIAC Initial Shareholders.

Date, Time and Place of General Meeting

The General Meeting will be held on December 15, 2021 at 9:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

Proposals at the General Meeting

At the General Meeting, IIAC shareholders will vote on the following three proposals:

 

   

Business Combination Proposal — to consider and vote upon a proposal by ordinary resolution that the Business Combination Agreement and the consummation of the transactions contemplated thereby be authorized, approved and confirmed in all respects (Proposal No. 1);

 

   

Merger Proposal — to consider and vote upon a proposal by special resolution that the Plan of Merger in the form tabled to the General Meeting pursuant to which Zegna Merger Sub will merge with and into IIAC so that IIAC will be the surviving company and all the rights and obligations of Zegna Merger Sub will be assumed by IIAC by virtue of such Merger pursuant to the Cayman Islands Companies Act, and the consummation of the Merger and the remaining transactions contemplated thereby, be authorized, approved and confirmed in all respects; and IIAC be authorized to enter into the Plan of Merger (Proposal No. 2); and

 

   

Adjournment Proposal — to consider and vote upon a proposal by ordinary resolution to adjourn the General Meeting to a later date or dates (A) in order to solicit additional proxies for the purpose of obtaining IIAC shareholder approval of the transaction proposals to be voted upon at the General Meeting, (B) if as of the time for which the General Meeting is scheduled, there are insufficient IIAC Ordinary Shares represented (either in person or by proxy) to constitute a quorum necessary to conduct business at the General Meeting, (C) to allow reasonable time for the filing or mailing of any supplemental or amended disclosures that IIAC has determined, based on the advice of outside legal counsel, is reasonably likely to be required under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the IIAC shareholders prior to the General Meeting, or (D) if IIAC shareholders redeem an amount of Class A Shares such that the Aggregate Transaction Proceeds Condition is not satisfied (Proposal No. 3).

 

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THE IIAC BOARD RECOMMENDS THAT

YOU VOTE “FOR” EACH OF THESE PROPOSALS.

Voting Power; Record Date

As a shareholder of IIAC, you have a right to vote on certain matters affecting IIAC. The proposals that will be presented at the General Meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement/prospectus. If you are a shareholder, you will be entitled to vote or direct votes to be cast at the General Meeting if you owned IIAC Ordinary Shares at the close of business on November 5, 2021, which is the record date for the General Meeting. You are entitled to one vote for each IIAC Ordinary Share that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 50,312,500 IIAC Ordinary Shares outstanding, of which 40,250,000 are public shares and 10,062,500 are Founder Shares held by the IIAC Initial Shareholders.

Vote of the IIAC Initial Shareholders and IIAC’s Other Directors and Officers

Prior to the IIAC IPO, IIAC entered into a letter agreement with the IIAC Initial Shareholders and the other current directors and officers of IIAC, pursuant to which each agreed to vote any IIAC Ordinary Shares owned by them in favor of an initial business combination. This agreement applies to the IIAC Initial Shareholders, including IIAC Sponsor, as it relates to the Founder Shares and the requirement to vote all of the Founder Shares in favor of the Business Combination Proposal and for all other proposals presented to IIAC shareholders in this proxy statement/prospectus. As of the record date, the IIAC Initial Shareholders own 10,062,500 Founder Shares, representing 20% of the IIAC Ordinary Shares then outstanding and entitled to vote at the General Meeting.

The IIAC Initial Shareholders and the other current directors and officers of IIAC have waived any redemption rights, including with respect to Class A Shares purchased in the IIAC IPO or in the aftermarket, in connection with Business Combination. The Founder Shares held by the IIAC Initial Shareholders have no redemption rights upon the liquidation of IIAC and will be worthless if no business combination is effected by IIAC by November 23, 2022. However, the IIAC Initial Shareholders and the other current directors and officers of IIAC are entitled to redemption rights upon the liquidation of IIAC with respect to any public shares they may own.

The IIAC Initial Shareholders and the other current directors and officers of IIAC have, for no additional consideration, waived any redemption rights, including with respect to Class A Shares purchased in the IIAC IPO or in the aftermarket, in connection with the Business Combination. The Founder Shares held by the IIAC Initial Shareholders have no redemption rights upon the liquidation of IIAC and will be worthless if no business combination is effected by IIAC by November 23, 2022. However, the IIAC Sponsor and the current directors and officers are entitled to redemption rights upon the liquidation of IIAC with respect to any Class A Shares they may own.

Quorum and Required Vote for Proposals for the General Meeting

One or more shareholders who together hold a majority of the issued and outstanding IIAC Ordinary Shares entitled to vote at the General Meeting must be present, in person or represented by proxy, at the General Meeting to constitute a quorum and in order to conduct business at the General Meeting. Broker non-votes will not be counted as present for the purpose of determining a quorum. Abstentions will be considered present for the purposes of establishing a quorum. The IIAC Initial Shareholders, who own 20% of the issued and outstanding IIAC Ordinary Shares as of the record date, will count towards this quorum. As a result, as of the record date, in addition to the shares of the IIAC Initial Shareholders, an additional 15,093,751 IIAC Ordinary Shares held by public shareholders would be required to achieve a quorum. In the absence of a quorum, the chairman of the General Meeting has power to adjourn the General Meeting.

 

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The approval of each of the Business Combination Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present the affirmative vote of the holders of at least a majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a two-thirds majority of the issued IIAC Ordinary Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. Accordingly, an IIAC shareholder’s failure to vote by proxy or to vote in person at the General Meeting will not be counted towards the number of IIAC Ordinary Shares required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal, Adjournment Proposal or Merger Proposal. Broker non-votes will not be counted in connection with the determination of whether a valid quorum is established, and will have no effect on the Business Combination Proposal, Adjournment Proposal or Merger Proposal. Abstentions will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal. However, the NYSE requires that for the Business Combination Proposal, Adjournment Proposal or Merger Proposal to be approved, there must be more votes cast in favor of the proposal than the aggregate of votes against such proposal plus abstentions. Broker non-votes do not count as votes cast. Therefore, in order to maintain compliance with this NYSE requirement, abstentions will count as a vote “AGAINST” each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal.

The Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Business Combination Proposal and the Merger Proposal are conditioned upon the approval of each other. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal or the Merger Proposal does not receive the requisite vote for approval, then IIAC will not consummate the Business Combination. If IIAC does not consummate the Business Combination and fails to complete an initial business combination by November 23, 2022, IIAC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the public shareholders.

Recommendation to IIAC Shareholders

The IIAC Board believes that each of the Business Combination Proposal, Merger Proposal and Adjournment Proposal to be presented at the General Meeting is in the best interests of IIAC and its shareholders and unanimously recommends that its shareholders vote “FOR” each of the proposals.

When you consider the recommendation of the IIAC Board in favor of approval of the Business Combination Proposal and the Merger Proposal, you should keep in mind that IIAC Sponsor and certain members of the IIAC Board and officers of IIAC have interests in the Business Combination and the Merger that are different from or in addition to (or which may conflict with) your interests as a shareholder. Shareholders should take these interests into account in deciding whether to approve the proposals presented at the General Meeting, including the Business Combination Proposal and the Merger Proposal. These interests include, among other things:

 

   

the fact that the IIAC Sponsor and IIAC’s directors have agreed not to redeem any Class A Shares held by them in connection with a shareholder vote to approve a proposed initial business combination, including the Business Combination;

 

   

the fact that the IIAC Sponsor paid an aggregate of $25,000 for the 10,062,500 Founder Shares currently owned by the IIAC Sponsor and the Other Class B Shareholders and such securities will have a significantly higher value upon the consummation of the Business Combination;

 

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the fact that 50% of the Ordinary Shares into which the Founder Shares will be exchanged will be held in escrow and will be released to the IIAC Initial Shareholders, pro rata, upon satisfaction of certain share price triggers. During the period that such Ordinary Shares are held in escrow, the IIAC Initial Shareholders will not be entitled to vote or receive dividends thereon;

 

   

the fact that the IIAC Sponsor paid an aggregate of $10,050,000 for 6,700,000 warrants, each exercisable to purchase one Class A Share at $11.50 per share, subject to adjustment, and such warrants will expire as worthless if an initial business combination is not consummated by November 23, 2022;

 

   

the fact that Sponsor Group paid an aggregate of $235,575,000 for its investment in Zegna (including the FPA Purchaser’s investment in the PIPE Financing and the Forward Purchase), as summarized in the table below, and, following the consummation of the Business Combination, the aggregate value of the IIAC Sponsor’s investment will be $292,303,275 (excluding the Escrowed Shares), based upon the respective closing prices of the Class A Shares and the IIAC Public Warrants on the NYSE on October 28, 2021.

Sponsor Group Ownership of IIAC Prior to Closing

 

     Securities held by Sponsor Group      Sponsor Cost at IIAC’s
initial public offering ($)
 

Class A Shares

     —          —    

Founder Shares

     9,937,500      $ 25,000  

IIAC Private Placement Warrants

     6,700,000      $ 10,050,000  
     

 

 

 

Total

      $ 10,075,000  
     

 

 

 

Sponsor Group Ownership of Zegna Following the Closing

 

     Securities held by
Sponsor Group Prior
to Closing
    Value per
Security ($)
     Sponsor Group
Cost at Closing ($)
    Total Value ($)  

Ordinary Shares Issued Pursuant to the PIPE Financing

     620,000     $ 10.02      $ 6,200,000     $ 6,212,400  

Ordinary Shares Issued Pursuant to the Forward Purchase

     22,500,000     $ 10.02      $ 219,300,000 (1)    $ 225,450,000  

Ordinary Shares Issued to Holders of Founder Shares

     4,968,750 (2)    $ 10.02        —       $ 49,786,875  

Zegna Private Placement Warrants

     6,700,000     $ 1.62        —       $ 10,854,000  
       

 

 

   

 

 

 

Total

        $ 225,500,000     $ 292,303,275  
       

 

 

   

 

 

 

 

(1)

Under the Forward Purchase Agreement, the FPA Purchaser will purchase 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000, subject to adjustment in accordance with the terms of the Forward Purchase Agreement. The dollar amount listed in the chart is an approximate amount for illustrative purposes only and is based on the Balance Sheet Exchange Rate.

 

(2)

Excludes 4,968,750 Escrowed Shares which will be held in escrow until the satisfaction of the relevant release conditions or lapse of the prescribed period of time. As long as any such Escrowed Shares are held in escrow, the IIAC Sponsor’s voting and economic rights shall be restricted.

 

   

the fact that the IIAC Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on

 

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IIAC’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. IIAC’s audit committee reviews on a quarterly basis all payments that were made to the IIAC Sponsor, IIAC’s executive officers or directors, or IIAC’s or their affiliates. Any such payments prior to an initial business combination are made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, IIAC does not have any additional controls in place governing IIAC’s reimbursement payments to IIAC’s directors and executive officers for their out-of-pocket expenses incurred in connection with IIAC’s activities on IIAC’s behalf in connection with identifying and consummating an initial business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and consulting fees, is paid by IIAC to IIAC Sponsor, IIAC’s executive officers and directors, or any of their respective affiliates, prior to completion of its initial business combination. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by IIAC’s executive officers and directors and there are no outstanding out-of-pocket expenses for which IIAC’s executive officers or directors are awaiting reimbursement;

 

   

the fact that the IIAC Sponsor, the Other Class B Shareholders and IIAC’s other current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if IIAC fails to complete an initial business combination by November 23, 2022;

 

   

the fact that the Shareholders Agreement will be entered into by, among others, the IIAC Sponsor, and the Registration Rights Agreement will be entered into by, among others, the IIAC Sponsor and the Other Class B Shareholders;

 

   

the fact that, pursuant to the Business Combination Agreement, the IIAC Sponsor will have certain governance rights in respect of Zegna that will be set forth in Zegna’s governing documents and in the Shareholders Agreement, as described in “Description of Zegna Securities—Board of Directors—Nomination and Appointment” and “The Business Combination Agreement and Ancillary Documents—Ancillary Documents—Shareholders Agreement.

 

   

the fact that the Business Combination Agreement provides that Andrea C. Bonomi, who is currently a member of IIAC’s advisory board, will be appointed as a member of the Zegna Board following the Closing. Mr. Bonomi is also Chairman of the Industrial Advisory Board of Investindustrial, and has or may have in the future direct or indirect investments and interests in the performance of Zegna, Investindustrial or their respective affiliates;

 

   

the fact that the Business Combination Agreement provides that Sergio P. Ermotti, who is currently an independent director and the chairman of the IIAC Board, owns 75,000 Class B Shares and has an ownership interest in the IIAC Sponsor (through which he has indirect ownership of additional Class B Shares and IIAC Private Placement Warrants to purchase Class A Shares), will be appointed as a member of the Zegna Board following the Closing and, in connection with the Closing, will receive a one-time grant of 100,000 Zegna Private Placement Warrants, subject to corporate approvals;

 

   

the right of the IIAC Sponsor and the Other Class B Shareholders to hold Ordinary Shares following the Business Combination, subject to the terms and conditions of the IIAC Sponsor Lock-Up Agreement;

 

   

the fact that the Business Combination Agreement provides for the continued indemnification of IIAC’s existing directors and officers and the members of IIAC’s advisory board and requires Zegna to purchase, at or prior to Closing, and maintain in effect for a period of six (6) years after the Closing Date, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain IIAC’s directors and officers after the Business Combination;

 

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the fact that the IIAC 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;

 

   

the IIAC Sponsor and its affiliates can earn a positive rate of return on their investment, even if other IIAC shareholders experience a negative rate of return in the post-business combination company;

 

   

the fact that the FPA Purchaser, an affiliate of the IIAC Sponsor, has entered into the Forward Purchase Agreement with IIAC and committed to purchase from IIAC up to 25,000,000 Class A Shares on the terms specified therein in connection with the Business Combination, which Forward Purchase Agreement was amended in connection with the Business Combination Agreement such that the FPA Purchaser committed to purchase from IIAC 22,500,000 Class A Shares for an aggregate purchase price of €184,500,000 (approximately $219,300,000 at the Balance Sheet Exchange Rate, subject to adjustment in accordance with the terms of the Forward Purchase Agreement;

 

   

the fact that, in connection with the PIPE Financing, the FPA Purchaser and Sergio P. Ermotti, the chairman of the IIAC Board, will subscribe for 620,000 and 120,000 Ordinary Shares, respectively;

 

   

the fact that the IIAC Sponsor and IIAC’s officers and directors will lose their investment in IIAC and will not be reimbursed for any out-of-pocket expenses incurred by them on IIAC’s behalf incident to identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by November 23, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event IIAC is unable to complete an initial business combination within the required time period, the IIAC Sponsor has agreed to indemnify IIAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which IIAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to IIAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; and

 

   

the fact that, at the option of the IIAC Sponsor, any amounts outstanding under any loan made by the IIAC Sponsor or any of its Affiliates to IIAC in an aggregate amount of up to $1,500,000 may be converted into warrants to purchase Class A Shares in connection with the consummation of the Business Combination (provided that, pursuant to the Sponsor Letter Agreement, the IIAC Sponsor has agreed not to convert such loans into warrants without the consent of Zegna), and such amounts (including amounts due under the outstanding promissory notes) will likely be written off if an initial business combination is not consummated by November 23, 2022.

Broker Non-Votes and Abstentions

In general, if your shares are held in “street name” and you do not instruct your broker, bank or other nominee on a timely basis on how to vote your shares, your broker, bank or other nominee, in its sole discretion, may either leave your shares unvoted or vote your shares on routine matters, but not on any non-routine matters. None of the proposals at the General Meeting are routine matters. As such, without your voting instructions, your brokerage firm cannot vote your shares on any proposal to be voted on at the General Meeting. You should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide. If you do not provide instructions with your proxy card, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares. This indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.”

 

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Broker non-votes will not be considered present for the purposes of establishing a quorum, and will have no effect on the Business Combination Proposal, Merger Proposal, or Adjournment Proposal.

Abstentions will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal. However, the NYSE requires that for the Business Combination Proposal, Adjournment Proposal or Merger Proposal to be approved, there must be more votes cast in favor of the proposal than the aggregate of votes against such proposal plus abstentions. Broker non-votes do not count as votes cast. Therefore, in order to maintain compliance with this NYSE requirement, abstentions will count as a vote “AGAINST” each of the Business Combination Proposal, Adjournment Proposal and Merger Proposal.

Voting Your Shares — Shareholders of Record

IIAC shareholders may vote by mail or in person at the General Meeting. IIAC recommends that you submit your proxy even if you plan to attend the General Meeting. Each IIAC Ordinary Share that you own in your name entitles you to one vote on each of the proposals for the General Meeting.

If your shares registered directly in your name, you are considered, with respect to those shares, the “shareholder of record.” If your shares are held in a stock brokerage account or by a bank or other nominee or intermediary, you are considered the beneficial owner of shares held in “street name” and are considered a “non-record (beneficial) shareholder.”

Voting by Mail. You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the General Meeting in the manner you indicate. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. If you sign and return the proxy card but do not give instructions on how to vote your shares, your IIAC Ordinary Shares will be voted as recommended by the IIAC Board. The IIAC Board recommends voting “FOR” the Business Combination Proposal, “FOR” the Merger Proposal and “FOR” the Adjournment Proposal. Votes submitted by mail must be received by 5:00 p.m., Eastern Time, on December 14, 2021.

Voting in Person at the Meeting. If you attend the General Meeting and plan to vote in person, you will be provided with a ballot at the General Meeting. Please see “—Attending the General Meeting” below for more details.

Voting Your Shares — Beneficial Owners

If your shares are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of shares held in “street name” and this proxy statement/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the shareholder of record for purposes of voting at the General Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account by following the instructions that the broker, bank or other nominee provides you along with this proxy statement/prospectus. Your broker, bank or other nominee may have an earlier deadline by which you must provide instructions to it as to how to vote your shares. As a beneficial owner, if you wish to vote at the General Meeting, you will need to bring to the General Meeting a legal proxy from your broker, bank or other nominee authorizing you to vote those shares. Please see “—Attending the General Meeting” below for more details.

Attending the General Meeting

Only IIAC shareholders on the record date or their legal proxy holders may attend the General Meeting. To be admitted to the General Meeting, you will need a form of photo identification and valid proof of

 

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ownership of IIAC Ordinary Shares or a valid legal proxy. If you have a legal proxy from a shareholder of record, you must bring a form of photo identification and the legal proxy to the General Meeting. If you have a legal proxy from a “street name” shareholder, you must bring a form of photo identification, a legal proxy from the record holder (that is, the bank, broker or other holder of record) to the “street name” shareholder that is assignable, and the legal proxy from the “street name” shareholder to you. Shareholders may appoint only one proxy holder to attend on their behalf.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before the General Meeting or at the General Meeting by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify IIAC’s Secretary in writing to IIAC, Suite 1, 3rd Floor, 11-12 St James’s Square, London, United Kingdom, before the General Meeting that you have revoked your proxy; or

 

   

you may attend the General Meeting, revoke your proxy, and vote in person, as indicated above.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker for information on how to change or revoke your voting instructions.

No Additional Matters

The General Meeting has been called only to consider the approval of the Business Combination Proposal, Merger Proposal and Adjournment Proposal. Under the IIAC amended and restated memorandum and articles of association, other than procedural matters incident to the conduct of the General Meeting, no other matters may be considered at the General Meeting if they are not included in this proxy statement/prospectus and the notice of the General Meeting.

Who Can Answer Your Questions About Voting

If you are a shareholder and have any questions about how to vote or direct a vote in respect of your IIAC Ordinary Shares, you may call Morrow, IIAC’s proxy solicitor, at (800) 662-5200 (toll-free), or banks and brokerage firms, can call (203) 658-9400.

Redemption Rights

Pursuant to IIAC’s amended and restated memorandum and articles of association, any holders Class A Shares may demand that such shares be redeemed in exchange for a pro rata share of the aggregate amount on deposit in the Trust Account, less taxes payable, calculated as of two business days prior to the Closing. If demand is properly made and the Business Combination is consummated, these shares, immediately prior to the Business Combination, will cease to be outstanding and will represent only the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account (calculated as of two business days prior to the Closing, less taxes payable). For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $402.5 million as of September 30, 2021, the estimated per share redemption price would have been approximately $ 10.0.

In order to exercise your redemption rights, you must:

 

   

if you hold IIAC Public Units, separate the underlying Class A Shares and IIAC Public Warrants;

 

   

prior to 5:00 p.m., Eastern Time, on December 13, 2021 (two business days before the initially scheduled General Meeting), identify yourself in writing as a beneficial holder and provide your legal name, phone number and address to the Transfer Agent in order to validly redeem your

 

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shares and tender your shares physically or electronically and submit a request in writing that IIAC redeem your public shares for cash to Continental Stock Transfer & Trust Company, the Transfer Agent, at the following address:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, NY 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

and

 

   

deliver your public shares either physically or electronically through Depository Trust Company’s DWAC system to the Transfer Agent at least two business days before the initially scheduled General Meeting. Shareholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. Shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and deliver your public shares as described above, your shares will not be redeemed.

You do not have to be a record date holder in order to exercise your redemption rights. Shareholders seeking to exercise their redemption rights, whether they are registered holders or hold their shares in “street name” are required to either tender their certificates to the Transfer Agent prior to the date set forth in this proxy statement/prospectus, or up to two business days prior to the initially scheduled vote on the Business Combination Proposal at the General Meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s DWAC system, at such shareholder’s option. The requirement for physical or electronic delivery prior to the General Meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the Business Combination is approved.

Holders of outstanding IIAC Public Units must separate the underlying Class A Shares and IIAC Public Warrants prior to exercising redemption rights with respect to the public shares.

If you hold IIAC Public Units registered in your own name, you must deliver the certificate for such units to the Transfer Agent with written instructions to separate such units into Class A Shares and IIAC Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the Class A Shares from the IIAC Public Units.

If a broker, dealer, commercial bank, trust company or other nominee holds your IIAC Public Units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to the Transfer Agent. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using Depository Trust Company’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of Class A Shares and IIAC Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the IIAC Public Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your IIAC Public Units to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Each redemption of Class A Shares by IIAC’s public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $402.5 million as of September 30, 2021.

 

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The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Shares by IIAC’s public shareholders, the Aggregate Transaction Proceeds Condition is not met or is not waived, then Zegna may elect not to consummate the Business Combination. In addition, in no event will IIAC r