It might be acquired by British private equity firm Permira

Apr 30, 2012 08:21 GMT  ·  By

We had some doubts in the past that Nokia might sell its Vertu luxury subsidiary, but the latest reports almost confirm that the Finnish company is close to get rid of it.

This is the second time Financial Times reports on Nokia’s intention to sell Vertu to the highest bidder. We reported several months ago that the Finnish handset maker appointed Goldman Sachs to overlook the possible sale of the Vertu brand.

Although neither confirmed the move, it appears that Nokia is now in advanced talks with a British private equity firm that wants to acquire Vertu.

According to Financial Times, Permira is in discussions to purchase Vertu for about €200 million ($265 million). That would not be a total surprise as Permira already owns other luxury brands such as Valentino and Hugo Boss.

It appears that Permira was not the only entity interested in acquiring Nokia’s Vertu brand. EQT, another private equity company has also been trying to negotiate a deal with the Finnish company, but sources close to the matter claim that discussions are not progressing anymore.

So far, it’s unclear why EQT failed to successfully ink a deal with Nokia, but we suspect that the former’s offer did not meet the latter’s demands.

Furthermore, it appears that Permira is more interested in Vertu’s brand and less in the technology it currently puts into its luxury mobile phones.

There are reports from persons with knowledge of the deal that Permira wants Nokia’s Vertu luxury subsidiary for its potential on more wealthy markets such as Asia and Middle East.

In fact, this seems to be Permira’s only reason for acquiring Vertu brand, though it’s unclear if the increase in sales would boost the company’s profits to make it worth the purchase.

Currently, Vertu’s revenues are estimated to be around €250 million ($331 million) per year. Last but not least, the company sells phones in more than 60 countries.