Apax makes it three big exits with CBR sale

Apax Partners has continued its string of recent exit successes by selling CBR, a German fashion retailer it co-owned with Cinven, to Swedish buyout firm EQT.

Apax Partners has completed its third lucrative exit of the year by selling CBR, a German retail group it co-owned with Cinven, to Swedish buyout firm EQT.

Terms of the transaction were not disclosed, but a banker familiar with the deal said it would net Apax a return of about four times its original investment.

Cinven bought CBR in October 2004 for an undisclosed sum believed to be about €1 billion ($1.31 billion), and two months later syndicated half the equity to Apax. The latter already had a number of other clothing retailers in its portfolio, including UK chain New Look, US group Calvin Klein and French brand Morgan International.

Since then the two firms have supported an ambitious expansion programme for CBR, which owns the Street One, Cecil and One Touch brands. The group now has 850 own-brand stores, more than 1500 concessions, and over 5,600 partner stores that sell its products. Its owners also focused on streamlining the company’s structures and getting its products from factories to stores much more quickly. As a result turnover topped €600 million in 2006, an increase of nearly 10 percent on the previous year.

It is EQT’s first acquisition since closing its fifth fund, EQT V, in December last year at €4.25 billion, although the fund also has an investment in Kabel BW, a German cable network operator EQT bought from its previous fund in April last year.

A spokesman for EQT said it hopes to continue CBR’s geographical expansion within Europe, and invest in new product development. The current management team, led by chief executive Hugo Reissner, will remain in place following the buyout.
The sale of CBR represents Apax’s third lucrative exit this year. The sale of Mölnlycke to Investor yielded a return of more than ten times the firm’s original investment, while the disposal of Greek mobile operator TIM Hellas to Egyptian entrepreneur Naguib Sawiris netted a 4.5 times return. Exit multiples like this are welcome news for Apax as it targets a first close on an €8.5 billion fund – its biggest ever.

The deal remains subject to approval from the competition authorities.