Bridgepoint acquires Fat Face from Advent International
Bridgepoint has signed a binding agreement to acquire the UK fashion brand Fat Face, which retails men's, women's and children's clothing and accessories created by its in-house design team, from Advent International in a secondary private equity transaction totalling GBP360m.
Fat Face operates a multi-channel model which includes 130 owned retail stores, mail order catalogues and an internet store, and has more than 1,500 employees. The company expects to post turnover of GBP111m and run rate Ebitda of GBP30.4m for the current financial year ending on May 31.
Bridgepoint estimates that the market for active lifestyle clothing addressed by Fat Face is currently worth GBP2.2bn a year and has grown significantly faster than the overall UK clothing market. Fat Face has opened an average of 17 new stores a year over the past five years.
Fat Face was founded in 1988 by Tim Slade and Jules Leaver, who started out selling printed sweatshirts and fleeces out of their rucksacks in the Alps in order to fund their skiing activities. Advent International acquired the firm in April 2005.
Fat Face will continue to be led by incumbent chief executive Louise Barnes and financial director Stuart Owens who, along with the rest of the management team, will be reinvesting in the business. Alan Giles will remain as non-executive chairman of the business, having been appointed last October.
Says Barnes: 'This deal marks the completion of a successful two years under Advent's ownership and recognises the great potential for this exciting brand and, together with Bridgepoint, we firmly believe we can bring our plans for the future to life.'
Fat Face already operates four sites outside the UK, including franchise operations in Iceland and Dubai, and further openings of new stores are planned in markets including the Middle East, Hong Kong and Singapore. In the UK, the company expects to open up to 15 new stores a year.
'Fat Face has a unique and very distinct retail proposition which has been developed successfully by an experienced and established management team,' says Bridgepoint partner Guy Weldon. 'It operates in a high growth segment of the clothing market with strong brand appeal, and has demonstrated resilient and consistent like-for-like performance.'
Bridgepoint has been an active investor in the European retail sector through investments in Pets at Home and Molton Brown in the UK, Nocibé and Alain Afflelou in France and Limoni in Italy.
Debt for the acquisition will be provided by BNP Paribas, advised by law firm White & Case. Advisers for Bridgepoint were UBS (corporate finance), KPMG (financial due diligence), Pragma (commercial/market), Marsh (insurance) and Travers Smith (legal). Advent International was advised by Rothschild (corporate finance), Weil, Gotshal & Manges (legal), KPMG (vendor due diligence) and OC&C (market due diligence), while the management by were advised Berwin, Leighton, Paisner (legal) and PWC (tax).
Founded in 1984, Advent International has offices and more than 100 investment professionals in 14 countries in western and central Europe, North America, Latin America and Asia. Focusing on cross-border, strategic restructuring and growth opportunities in five core sectors, the firm has raised USD10bn in private equity capital and completed more than 200 buyout and private equity transactions valued at more than USD27bn in 35 countries.
Bridgepoint is a European private equity firm that focuses on the acquisition of companies valued up to EUR1bn. With some EUR8bn of capital raised to date, it typically acquires well-managed companies in attractive sectors with the potential to grow organically or through acquisition.
Last year Bridgepoint invested more than EUR868m in five new investments with a total transaction value of EUR3bn, and carried out realisations that enabled it to return more than EUR2bn to investors. Bridgepoint currently has offices in Frankfurt, London, Luxembourg, Madrid, Milan, Paris and Stockholm, and last month said it would open a regional office in Warsaw to address opportunities in the central and east European market.