StanChart, L Capital in $81m luxury buyout

A syndicate including Standard Chartered's private equity arm and an LVMH-backed private equity fund have purchased Singapore-based luxury watch retailer Sincere.

Standard Chartered Private Equity and L Capital Asia, the Asian private equity arm of LVMH Group, have acquired stakes of 26.33 percent each in Sincere Watch, a Singapore-based retailer and distributor of luxury watches.

In a management buyout that closed last month, the consortium acquired roughly 205.7 million shares in the company for about S$0.55 each, thereby valuing the deal at about S$113 million ($81.4 million; €54.7 million), according to the company’s website.

Tay Liam Wee, director of Triple A Enterprises and chairman and managing director of Sincere Watch, has also acquired a 26.33 percent stake in the business. Other investors in the consortium include ABN AMRO, which has a stake of 10 percent; BNP, with a stake of 2.75 percent; ING, with a stake of 7.25 percent; and TC Capital, which has a stake of 1 percent.

Luxury watches: private equity accessory

The shares were purchased from Peace Mark, a Hong Kong-listed watchmaker and retailer, which acquired Sincere in 2007 and later said it was unable to meet demands to repay debt. It had subsequently pledged a 99.4 percent stake in the Singaporean watch company as collateral to banks including ABN AMRO and BNP Paribas, Bloomberg reported.

Last year, Asian buyout firm CVC Asia Pacific reportedly agreed to acquire  a stake of 30 percent in Peace Mark. However, Peace Mark later revealed the the firm had withdrawn its indicative offer. Peace Mark did not provide any reasons for the move.  

This is Standard Chartered Private Equity’s first investment in the luxury goods sector, Alastair Morrison, managing director and global head of private equity, said in a statement. He added: “Sincere has a proven record of success in the industry in the region, and coupled with our strong international network and our deep knowledge of Asian companies, we see this investment as a very strong compelling Asian growth story.”

Established in 1997, and listed on the Singapore Exchange’s main board in 2005, Sincere has a network of outlets across Singapore, Australia, China, Hong Kong, Indonesia, Macau, Malaysia, South Korea, Taiwan, the Philippines and Thailand. Its businesses include brand management, fine watch retailing, travel watch retailing, and lifestyle watch retailing. Its portfolio includes brands such as Franck Muller and Ebel.

Following the deal, Wee will be Sincere's chairman and group managing director. Morrison and Ravi Thakran, managing director of L Capital Asia and group president of South Asia, Southeast Asia and Middle East for LVMH Group, will serve as non-executive directors.

Standard Chartered Private Equity makes investments from its balance sheet. It invests in mid- to late-stage companies in need of expansion capital or acquisition finance and in management buyouts in Greater China, India, Korea and Southeast Asia.

L Capital Asia is a $400 million private equity fund sponsored by the LVMH Group, which is one of the world’s largest luxury goods conglomerates and owns brands such as Louis Vuitton, Givenchy, Kenzo, TAG Heuer and Dior. Its team comprises of nine investment professionals based in Mumbai, Singapore and Shanghai.