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LBO France eyes French retail deal

The transaction, which is likely to have an enterprise value of between €500m and €600m, will be the second deal from the firm’s White Knight Fund IX

Paris-based buyout house LBO France has entered exclusive negotiations with Roger Zannier to acquire IKKS, a French clothing business.

Financial details of the transaction were undisclosed, but the enterprise value will be between €500 million and €600 million, according to a market source. LBO France declined to comment on the financials.

LBO France will acquire a majority stake in the business, while Roger Zannier will retain a significant minority stake, Vincent Briançon, a partner at LBO France told Private Equity International.

The firm briefly looked at the company when Groupe Zannier put the company up for sale last year, but the price aspirations were “rather high”, Briançon said.

LBO France decided not to participate in the second round of the auction, he added. In July 2014, Roger Zannier, the founder of Groupe Zannier, who is no longer a shareholder in that group, bought IKKS out of Groupe Zannier using a high yield bond of €320 million, he said.

LBO France then offered Zannier an opportunity to reduce its stake but to stay involved as a significant minority shareholder.

IKKS has a wide retail network of 526 boutiques, mainly in prime city centre areas, 218 department store corners as well as wholesale distribution and an online shop. In 2014, the group’s sales exceeded €300 million, of which roughly 20 percent was generated outside of France. IKKS is already present in Benelux, in Spain and in the Middle East and has recently opened points of sales in Germany.

Alongside the management team, LBO France would continue to support the group’s growth, notably by accelerating its development in Paris, implementing a significantly strengthened communications
programme, as well as supporting international expansion in Germany and Italy.

The deal, which is expected to be signed in May, will be the second deal from LBO France’s White Knight IX vehicle, which is currently in market targeting €1 billion.

In August last year, the firm entered into exclusive negotiations with listed French investment group Wendel to acquire Chryso, a cement business division of Materis, a French special chemicals business, for approximately €290 million. The fund held a “technical close” ahead of the first close in order to fund that deal, the source said at the time.