TowerBrook buys majority stake in Kaporal 5

Ellie Pullen
21 May 2013

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TowerBrook Capital Partners has acquired a majority stake in French clothing retailer Kaporal 5.

The deal, which also sees existing minority shareholder MBO Partenaires and company founder Laurent Emsellem reinvesting in Kaporal, has given the business an enterprise value of €50-100m, local media reported. The transaction is expected to close in July.

The GP is understood to have refinanced the company's existing debt, which sits at less than 1x EBITDA, as TowerBrook wanted to opt for a more prudent transaction.

TowerBrook had been in talks with Emsellem since mid-2012 about the possibility of a transaction, as the firm tends to favour sourcing its deals on a proprietary basis. The fresh capital will allow the company to grow its online marketing platform, as well as expand its product development, retail and wholesale strategies.

MBO Partenaires originally invested in Kaporal's parent company MC Lem in April 2008 and acquired a 33% stake alongside Emsellem, according to unquote" data.

TowerBrook typically invests in mid- to large-cap companies for a controlling stake. The firm recently closed its fourth fund, TowerBrook Investors IV, on its hard-cap of €3.5bn. TowerBrook has had experience in the clothing sector in the past, having sold its portfolio company Jimmy Choo for £550m to trade player Labelux in 2011, reaping a 32% IRR in the process.

Company
Kaporal was founded in Marseille in 2003, originally as a denim supplier. The company now provides a range of clothing for the French market, but continues to specialise in jeans. The company runs 50 stores throughout France, and last year reported revenues of €110m, a €20m increase from 2011.

People
Laurent Emsellem is Kaporal's founder and Santiago Cuchy is the company's CEO. Karim Saddi and Winston Ginsberg are managing directors at TowerBrook.

Former chairman of French retailer Carrefour Daniel Bernard, who also sits on TowerBrook's senior advisory board, has been appointed to Kaporal's board as an executive chairman.

Michael Rahamim will join Kaporal's board as a non-executive director. Rahamim is also the chairman of Phase Eight, another TowerBrook-backed retailer.

Advisers
Equity - Weil Gotshal & Manges (Legal).