S.Africa’s Brait to acquire British fashion retailer New Look for $1.2 bn

One of Africa's biggest investment groups Brait SE yesterday agreed to acquire almost all of British fashion retailer New Look Retail Group Ltd from private equity funds advised by Apax Partners and Permira for approximately £780 million ($1.2 million).

Under the terms, Brait, majority-owned by South African retail tycoon Chris Weise, will acquire around 90-per cent interest in New Look, while the remaining 10 per cent will be held by its founder Tom Singh, OBE, and his family, and the current management of the company.

The transaction gives New Look an enterprise value of around £1.9 billion, including its £1-billion debt.

Commenting on the deal Brait CEO John Gnodde said,  ''New Look is an attractive investment opportunity for Brait – it is a market leading brand, with a strong track record of double digit EBITDA growth, solid cash flow conversion, international reach, and the potential to grow rapidly in a number of geographic markets including China.''

New Look CEO Anders Kristiansen said, ''We are delighted to have announced this transaction. Brait have a track record of long-term and supportive investments – they give us the perfect platform to continue our strategy of growing the New Look brand in the UK, Europe and China.''

New Look, founded in 1969, has grown from a single store to become a leading multichannel brand in the UK offering apparel, footwear and accessories for women, men and teenage girls.

The Group has over 800 stores across the globe in 21 countries, including 569 in the UK and 19 in China, the world's most populous country, where the company has ambitious growth plans. New Look's competitors include Primark, Next, H&M and others.

Martin Halusa, chairman of Apax Partners said: ''Funds advised by Apax Partners and Permira are glad to have accompanied New Look on its international expansion and ecommerce growth and delivered substantial returns to its investors.''

The deal is expected to close in June subject to customary closing conditions and regulatory approvals. Further to the completion, Kristiansen will continue to lead the company.

According to some analysts, New Look is an attractive investment opportunity for Brait as it has the potential for rapid growth in several other markets including China. Moreover, the investment is not as risky as Nigeria and is a logical strategic move.

Quoting sources, Reuters reported that there were other bidders also including Asian for the UK retailer but Brait's offer was the highest and more than what the company expected.
 
Malta-registered Brait is an investment holding company listed on the stock exchanges of Johannesburg and Luxembourg. It is focused on driving sustainable long-term growth and value creation in its investment portfolio comprising holdings in privately held companies operating in the broad consumer sector.

In 2011, Brait raised 8.6 billion rand ($730 million) that was considered the largest capital raising on the African continent at the time.

Last month Brait made another major investment by acquiring fitness chain Virgin Active for about $1 billion, after selling its stake in Africa's leading budget clothes retailer Pepkor to furniture company Steinhoff International for $5.7-bn, in one of the country's biggest deals.

Apax Partners and Permira are London-based global private equity firms investing across diverse sectors including technology, telecom, services, healthcare and consumer.

New Look was advised by Goldman Sachs International, JP Morgan Cazenove, Clifford Chance and Price Waterhouse Cooper on this transaction, while Brait was advised by Rand Merchant Bank and Nomura International.