L Capital Asia, the private equity arm of Louis Vuitton Moët Hennessy (LVMH), has taken a 40 percent stake in Australian sportswear firm 2XU in a deal valued at A$75 million (€50 million; $68 million), according to Christina Teo, L Capital's managing director.
The investment is the first from L Capital Asia II, a $950 million vehicle that closed in August.
2XU is a producer of technical sportswear, which uses fabrics and technology developed to enhance sports performance and recovery.
The stake was purchased from the founders, who still hold the majority of 2XU, and from Lazard Private Equity, which reduced its holding in the company, according to a joint statement.
L Capital intends to make 2XU Australia’s first major global sportswear brand, Clyde Davenport, 2XU’s co-founder, said in the statement.
The brand is already established in several countries, but L Capital believes it can take it into more markets “within its current product category as well as outside the sports category through product line expansion”, Teo told Private Equity International.
“Most products are sold through a few distribution channels and the retail presence is still very limited, so B2C retail development is another area we can look into for expansion.”
“This company is cash rich and cash flow positive, and capital is not what we will bring.”
The 2XU deal is L Capital’s second in Australia this year. In April, the firm acquired a 49.9 percent stake in Australian outdoor clothing retailer R.M. Williams, which was reportedly worth A$52 million, PEI reported earlier.