Leonard Green acquires 25% stake in Topshop

The deal, which eliminates the company’s bank debt, values Sir Philip Green’s fashion retailer at £2bn.

Leonard Green & Partners has acquired a 25 percent stake in UK fashion company Topshop/Topman, parent company Arcadia Group announced in a statement.

The transaction, which was completed Wednesday, values the company at £2 billion (€2.47 billion; $3.22 billion), according to the statement. Leonard Green’s stake was acquired for approximately £500 million (€617 million; $805 million), according to a Dealbook report.

The Los Angeles-based firm’s investment in Topshop/Topman allows Arcadia to eliminate bank debt, making the company “cash positive”, Arcadia said.



“Being debt free gives us the balance sheet and flexibility to look at other opportunities to consolidate or acquire, either on our own or in partnership with LGP, who have substantial capital available in their new fund,” according to a statement from Sir Philip Green of Arcadia.

Arcadia did not respond to a request for further comment. Leonard Green, which is headquartered in Los Angeles, was unavailable at press time.

Leonard Green closed its latest private equity fund on $6.25 billion in May. The firm had been targeting around $5 billion for Fund VI, the terms of which changed mid-fundraise. Leonard Green increased the percentage of transaction fees it will use to offset the fund’s management fees by 100 percent.

The firm already has several holdings in the fashion and retail industries, including J. Crew Group and Neiman Marcus. Earlier this year, the firm exited its holdings in David’s Bridal when the company was sold Clayton, Dubilier & Rice in a $1.05 billion deal.

To access more Leonard Green & Partners insights, analysis and data, click here