Gant IPO generates 90% IRR for 3i

3i and European private equity firm L Capital have generated gains of €44m and €76m respectively from the flotation of portfolio company Gant on the Swedish Stock Exchange.

London-listed private equity firm 3i and Paris and Milan-based private equity firm L Capital have partially exited their investment in Swedish clothing brand Gant through a €241 million ($291 million) flotation on the Stockholm Stock Exchange.
 
The IPO generated €44 million of proceeds for 3i and €76 million for L Capital. In a conference call, Mattias Eklund, partner at 3i Nordic, said the firm had made a money multiple of 4.7x its original investment and an IRR of 90 percent.
 
3i and L Capital led the €105 million buyout of Gant in July 2003. 3i invested €13 million for a 20.6 percent stake while L Capital, which was already an investor, increased its stake to 35.4 percent at the time of the buyout.
 
3i and L Capital will sell their entire holdings in Gant assuming an over-allotment option is exercised, according to 3i.
 
Eklund said Gant attracted interest from both trade and financial buyers but the two private equity firms had decided at the beginning of the investment that a flotation was the preferable exit option.
 
3i said that, since the buyout, Gant’s sales have increased from €384 million in 2002 to €592 million in 2005, while profits have increased by more than 85 percent over the period. The company has also launched a women’s wear line, strengthened its licensing business, entered 13 new markets and launched over 80 new Gant stores.
 
The present operation of Gant was founded in 1980 by Swedish entrepreneurs Lennart Björk, Klas Käll and Staffan Wittmark, who acquired the rights to design and sell the Gant brand – which was established in the US in 1949 – in Sweden. In early 1999, the company acquired the global rights to the Gant trademark.
 
Gant is currently present in 68 countries and its products are sold in more than 235 Gant stores, as well as in over 4,000 other retail locations.