Dutch court orders Nordian to proceed with J-Club acquisition

J-Club is a Netherlands-based private-label jewellery and accessories retailer that sells its products in department stores across Europe via retail concessions in 25 countries. Unquote reported in March 2020 that the coronavirus lockdown measures in place across much of Europe were set to have a significant impact on the company's revenues.

According to a statement from Netherlands-based law firm NautaDulith, which represented J-Club in the deal negotiations and subsequent litigation, Nordian had entered into a signing protocol on 28 February 2020, which also provided for the signing of an SPA in agreed form. The signing of the SPA was subject to conditions including Nordian obtaining W&I insurance.

Nordian was represented in the original deal by Corp Advocaten, according to court documents.

According to the same documents, the GP notified J-Club via email on 19 March 2020 that it would propose to postpone the transaction, citing the scale of coronavirus-related risks and the fact that Idinvest was no longer prepared to finance the deal.

The court documents contain correspondence from 24 February 2020, showing that Nordian had entered into the signing protocol under the assumption of obtaining bank financing of €40-45m, with interest from Idinvest and BlackRock. Idinvest's financing offer of €40m was valid until 28 February 2020. The GP offered two options for the transaction structure in its commitment letter of 24 February 2020, including variations on a vendor loan from the two founders and co-owners, Sjoerd Everts and Marcel van Doorn, who would reinvest in the business for a 19.5% stake each. The GP stated that its first transaction structure option would be binding, although conditional on obtaining W&I insurance.

Following Nordian's attempt to postpone the deal, J-Club's owners launched summary proceedings, according to NautaDulith's statement. Nordian's defence was that J-Club's owners could not expect the SPA to be signed in its originally agreed form, given the circumstances. However, the court found that "Nordian Capital had not honoured its best efforts obligation to obtain W&I insurance", according to the statement. The court also noted that the possibility of a lockdown had been discussed prior to the parties entering into the signing protocol, and that Nordian had waived the inclusion of a material adverse change clause.

The company's agreed enterprise value was €100m in the original agreement, with €100m to be paid on closing and €25m conditional on the realisation of a 3x money multiple, after which 50% of the proceeds (up to €25m) would be payable to Everts and van Doorn.

Nordian is currently deploying equity from its third fund, which held a final close in June 2019 on €320m. The GP planned to make an equity investment of €31.5m, according to the court documents.

Nordian had not responded to a request for comment at the time of publication.

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• Topics
• Investments
• Benelux
• people moves
• Netherlands
• Nordian Capital Partners
• coronavirus