It’s been a good week for private equity-owned clothing brands. Days after Permira agreed the sale of fashion label Valentino, Nordic buyout group Altor Equity Partners has sealed a lucrative partial exit from sportswear brand Helly Hansen.
Although the purchase price was undisclosed, Teachers' Private Capital (TPC) is understood to have paid in the region of NOK 2 billion ($328 million; €269 million) for a 75 percent stake in the business. That equates to five times the NOK 400 million equity invested by Altor in 2006 when it bought the business from Bahrain-based Investcorp for a reported NOK 800 million. Altor will retain a 25 percent stake in the business.
Helly Hansen has an extensive ski-wear range
“Helly Hansen has been a good investment for Altor, but we believe the positive momentum will continue and that we will experience continued growth in the years to come,” Altor partner Reynir Indahl said in a statement. “The company has a strong platform, a clear strategy and a strong management team. Altor is therefore very happy to continue with ownership and involvement together with OTPP.”
Peter Sjölander, chief executive of Helly Hansen, said OTPP would provide, “Expertise, global relationships and financial resources to further grow the company, especially in North America. Our ambition to become ‘a billion dollar brand’ remains,” he added.
Altor acquired the business in 2006 from Investcorp for a reported NOK 800 million, with a 50:50 debt to equity split. Revenues that year amounted to NOK 1.4 billion. Last year, the business posted revenues of NOK 1,6 billion, Altor said.
We believe the positive momentum will continue and that we will experience continued growth in the years to come
Reynir Indahl, Altor
Altor said the company had improved profitability under its ownership from posting a loss to “industry-leading margins”. It has expanded its geographic footprint and developed new product categories, leading to double digit growth in recent years and significantly outperforming the market, Altor said.
The firm also offloaded Helly Hansen’s professional clothing business, which mainly made immersion suits for use aboard helicopters servicing the offshore oil and gas industry, to Montagu Private Equity last year. The intent was to refocus Helly Hansen on its popular sport and workwear clothing ranges.
Robert W Baird, ABG Sundal Collier, Wiersholm and PwC advised Altor on the sale.
TPC is the direct investment arm of one of Canada’s biggest pension funds, Ontario Teachers’ Pension Plan. Along with some of its Canadian peers, it is amongs the most acquisitive of institutional LPs in terms of direct investments.