LBO France buys 60% stake in IKKS

Zannier, who reinvested alongside LBO France, will keep a stake of around 30%. Meanwhile, New York-headquartered co-investment firm Silverfern deployed capital and secured a 10% interest.

The transaction, following the exclusive negotiations initiated by LBO France in April, gives the business an enterprise value in the region of €500-600m, according to market sources.

The GP's investment is the second via its White Knight IX fund. Launched in May 2013 with a €1bn target and a €1.5bn hard-cap, the buyout vehicle targets French companies within the mid-market with potential for international expansion, according to unquote" data. Prior to IKKS, its only investment to date was to finance the acquisition of chemical additive developer Chryso from Wendel-backed parent group Materis.

LBO France had already taken part in an unsuccessful auction process for the company in 2014. Organised by Rothschild, the sale by Groupe Zannier was brought to an end as the asset price neared the €600m mark and PAI Partners – the only remaining suitor at that time – decided to pull out, LBO France told  unquote".

The impasse was resolved when Zannier wholly acquired IKKS from parent Groupe Zannier. At that point, LBO France approached Zannier and suggested a private equity takeover to help him reduce his shareholding and minimise his exposure to risk as the sole owner, according to the GP. The process then evolved into exclusive, off-market negotiations. 

LBO France's interest in IKKS stems from the group's consolidated position in the accessible luxury segment of the French textile market. The GP plans to push IKKS's growth within the Paris region and bolster its presence abroad. The company already does business in Belgium, Luxembourg and Spain and is looking to expand into Italy and further into Germany, where two shops are already located.

LBO is a shareholder in several other French clothing retailers including Paris-based affordable luxury brand The Kooples, in which it owns a 20% stake after investing in 2011, according to unquote" data.

Debt
Prior to being bought by LBO France, IKKS had secured a €40m revolving credit facility from Natixis, Societe Generale CIB, UBS and Goldman Sachs, according to the GP. Following the buyout negotiations, the facility was renewed and brought down to €33m, which has been supplied by existing providers Natixis and Societe Generale, as well as Mediobanca.

In addition to the above, the transaction was financed by a €320m portable high-yield bond put in place by Roger Zannier in 2014 and carried into the current deal without any modifications.

Company
Spun out of parent Groupe Zannier in 2014, Groupe IKKS is a luxury fashion business targeting consumers in the "casual chic" segment via the brands IKKS, One Step and I.Code.

Headquartered in Saint-Macaire-en-Mauges, France, the business distributes its wares via 526 shops, 218 department stores and a number of online websites. In 2014, it generated more than €300m in turnover, with around 20% coming from abroad. Having established itself in the Benelux region, Spain and the Middle East, the company has recently expanded into the German market.

People
Vincent Briançon, a partner at LBO France, worked on the deal for the GP.

Advisers
Equity – Natixis (M&A); Societe Generale Corporate and Investment Banking (M&A); Mediobanca (M&A); Eight Advisory (Financial due diligence); Kéa Partners (Strategic due diligence); PwC (Environmental due diligence); Mayer Brown (Legal, Tax); Loyens & Loeff (Legal).
Vendor – Rothschild & Cie (M&A); EY (Financial due diligence, Legal, Tax); Darrois Villey Maillot Brochier (Legal).
Debt – White & Case (Legal).
Management – Callisto (Corporate finance); Fidal (Legal).

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• Topics
• France
• Buyouts
• Consumer
• France
• LBO France
• unq2015sep