European private equity firm Apax Partners has sold its remaining stake in its Tommy Hilfiger China joint venture to apparel company Phillips-Van Heusen (PVH) Corporation, who already holds about half of the company.
The sale to PVH, valued at $172 million, completes Apax’s exit from its 2006 investment in parent company Tommy Hilfiger, according to a statement.
The transaction is expected to close in the second quarter of the year and is subject to customary closing conditions and regulatory approvals.
PVH, the owner of the Tommy Hilfiger brand is considering an initial public offering of the China operations after buying Apax’s stake, according to reports.
Apax first acquired the clothing retailer in a take-private in 2006 valued at €1.2 billion. The firm made the investment from two funds – its €4.3 billion Europe Fund VI and its $856 million US Fund VII, as reported by Private Equity International.
In those two years, the firm promoted Fred Gehring from head of Europe to CEO, and embarked on an intense turnaround programme which included reducing US headcount by 40 percent, investing heavily in marketing and product quality to elevate the brand again, acquiring its Japanese licensee, forming a strategic alliance that made Macy’s its exclusive US retail partner, and consolidating its supplier base, the firm said in a release.
Apax voiced intentions to take Tommy public in 2008 but pulled back plans because of market conditions.
In 2010, Apax Partners made a 4.5x return on its investment in Tommy Hilfiger when it sold the company to clothing retailer Phillips-Van Heusen for €2.2 billion.
Since 2012, the first full year of operations after Apax, PVH and other shareholders formed a joint venture to acquire Tommy's business from its Chinese licensee, the company has doubled from approximately $70 million in revenue to a projected $140 million in revenue for 2015 with over 350 stores, of which 65 are directly operated, according to a statement.
Apax has had several retail and consumer investments over the years including Karl Lagerfeld, Cole Haan, New Look, Tommy Bahama and Spyder Active Sports.
The firm manages about $38 billion in assets across technology and telco, services, consumer and healthcare sectors.
In January 2016, PEI reported that the firm has launched its ninth flagship buyout fund targeting $7.5 billion in commitments.