Apax agrees to $570m shoe deal

Nike will sell footwear retailer Cole Haan to Apax Partners for $570m cash, which will include equity from Apax VIII.

Apax Partners has agreed to terms with Nike to acquire Cole Haan, a footwear retailer, for $570 million in cash, the firm announced in a statement. The transaction is expected to close in early 2013. 

Equity will be provided by Apax VIII, which is currently in fundraising, according to a source with knowledge of the deal. 

Apax VIII had raised at least €4.3 billion on an €9 billion target as of March, according to a Financial Times report. The firm has already used equity from Apax VIII in at least one other deal, having agreed to a $1.1 billion take-private of Garda World Securities in September. 

The firm’s previous flagship fund, the €11.2 billion Apax Europe VII, was generating a 1.1x multiple and 3 percent internal rate of return as of 30 June, according to Maryland State Retirement and Pension System documents. 

Apax is partnering with former Converse chief executive officer Jack Boys on the deal. During his time at Converse, the company’s sales grew from $150 million to more than $1 billion, according to a release. 

The firm hopes to see similar growth and expansion at Cole Haan, the source said, adding that the company had been something of a “small fish” compared to some of Nike’s other businesses. 

“Small fish” is a relative term of course, as Apax apparently beat out several other private equity firms for the business, according to reports. The New York Times has reported that TPG had been favored for the deal, as former Cole Haan chief Matthew Rubel now serves as a senior advisor for the firm. 

Apax already has an established record in the apparel and retail sectors in its own right. The firm generated a 4.5x return on its investment in clothing retailer Tommy Hilfiger, which it sold to Phillips-Van Heusen for €2.2 billion in 2010.

The firm’s current retail and customer investments include specialty apparel company rue21 and marketing services business Advantage Sales & Marketing, according to a release.