Tory Burch LLC is preparing to fund a partial management buyout of private investment firm General Atlantic’s long-held stake in the business through a leveraged financing package expected to total around $700m, according to a report by Bloomberg.
The New York-based luxury fashion group plans to allocate approximately $346m of the proceeds toward buying out the private equity firm’s interest, according to a person familiar with the matter. The size of General Atlantic’s remaining holding has not been disclosed.
General Atlantic first invested in the company in 2012, acquiring its stake as part of a settlement linked to a legal dispute involving founder Tory Burch and her former husband, Chris Burch.
The financing structure includes a seven-year term loan being marketed at a spread of 375 to 400 basis points over the benchmark, alongside a $300m revolving credit facility. Proceeds will also be used to refinance existing debt.
The transaction is being arranged by Bank of America, with lender commitments expected later this week.
Credit rating agencies offered mixed views on the proposed capital structure. S&P Global Ratings noted that the company has a history of using leverage to facilitate ownership changes while maintaining relatively disciplined debt management. However, Moody’s revised its outlook on the company to negative, citing higher leverage and reduced liquidity following the transaction.
Moody’s also flagged modest growth expectations over the next 12 to 18 months, pointing to a more challenging operating environment in the global luxury sector, where competitive pressures continue to weigh on expansion and investment requirements.
The deal underscores continued sponsor exits and shareholder reshuffling within the luxury retail space, where companies are increasingly turning to debt markets to fund ownership transitions and recapitalisations.
