Pants buyout dropped

Jeans-maker Levi Strauss has called off the $800m sale of its Dockers casual-pants business to Vestar Capital Partners after signing a letter of intent several weeks ago.

Levi Strauss, famous for its line of jeans, reneged on a letter of intent it signed several weeks ago to sell its Dockers casual-pants business to New York-based Vestar Capital Partners and apparel-industry entrepreneur Eric Rothfeld for $800 million (€635 million).

The Dockers line, which produces approximately $1.4 billion in annual revenues, has a drop in sales of nearly 20 percent for this year. Many prospective buyers said that reportedly Levi was looking to rake in about $1 billion in the sale and would not sell if its price was not match. New reports also said that other industry observers pegged the price at a more realistic $650 million.

Levi’s sale had been originally intended to reduce company debt. After canceling the deal, Levi stated that a recent upswing in its third-quarter profits also influenced its decision.

Vestar’s last purchased was back in January, when it bought 75 percent of the French operations of Houston-based funeral and cemetery operator SCI. Last June, Vestar announced two exits in the same day – the firm agreed to sell Sheridan Healthcare in a management buyout led by Boston-based JW Childs Associates; and also agreed to sell Sab Wabco, a Swedish brake systems maker for railways, in a deal valued at €310 million ($381 million).

Since its founding in 1988, Vestar has completed 45 investments with a total valuation in the region of $15 billion. With approximately $4 billion of funds under management, the firm also has offices in Denver, Colorado and Milan.