German perfume and cosmetics retailer Douglas on Monday said it
has signed an agreement to sell the company to CVC Capital
Partners, scrapping earlier plans for an initial public
offering.
Douglas, currently owned by private-equity firm Advent
International and the Kreke family, is being bought by a holding
company jointly owned by CVC and the family, who will maintain a
15% stake.
Financial details of the deal are confidential, but people
familiar with the matter have said the transaction values Douglas
at roughly €2.8 billion ($3.1 billion). Advent had initially sought
a valuation of between €3 billion and €3.5 billion for Douglas,
according to executives and people familiar with the matter.
News of the deal comes just days after Douglas announced plans
to list a minority stake on the Frankfurt stock exchange this
summer. An outright sale would replace plans for an IPO.
Advent initially sought a valuation of between €3 billion and
€3.5 billion for Douglas, according to executives and people
familiar with the matter, well above the apparent current
valuation.
Advent and the founding family of Douglas took the retailer
private in 2012 for roughly €1.5 billion. They subsequently sold
ancillary operations, including jewelry retailer Christ. Douglas
last year bought French perfume retailer Nocibé , boosting the
number of perfume and cosmetic outlets in its network to roughly
1,700.
CVC is no stranger to the sector. The buyout firm snapped up
Denmark's biggest health and beauty retailer, Matas A/S, for
roughly $900 million in 2006. Matas went public again in 2013.
Financial investor KKR & Co. and French Luxury goods giant
LVMH Moë t Hennessy Louis Vuitton SA have also weighed buying
Douglas, people familiar with the matter said earlier.
Douglas said last week that it expected earnings before
interest, taxes, depreciation and amortization, or Ebitda, of €274
million for the fiscal year ending September 30.
Record low interest rates and low bond yields have pushed the
German DAX30 benchmark index into record territory above 11,500
since March, facilitating initial public offerings. But at the same
time, many private-equity firms prefer a fast exit via direct sale
because an IPO exposes them to volatile stock markets.
Advent has hired Goldman Sachs Group Inc. and J.P. Morgan Chase
& Co. to advise on the dual track process. Additionally,
Deutsche Bank AG, Credit Suisse AG and Morgan Stanley have been
mandated help on a potential IPO, these people say.
CVC Managing Director Sø ren Vestergaard-Poulsen said the group
plans to expand Douglas with more acquisitions outside of
Europe.
Write to Eyk Henning at eyk.henning@wsj.com and Shayndi Raice at
shayndi.raice@wsj.com
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