Perceva to buy Fruit of the Loom lingerie division

It is understood that textile group Fruit of the Loom, owned by Warren Buffett's Berkshire Hathaway, mandated Societe Generale to find a buyer for its European lingerie brands, since the group wanted to focus on its main US operations.

The GP was contacted by Societe Generale in Q1 this year, along with a limited selection of other French investment funds. Perceva stated that the vendor's due diligence to find a suitable buyer was particularly thorough, since Fruit of the Loom will continue to work with Vanity Fair Brands via licensing agreements.

The Paris-based firm stated it has been able to build an ideal brand portfolio with the vendor as part of the transaction, with the various brands adressing different markets. Lou, for instance, focuses on high-end lingerie, while Variance products come at a lower price point and are typically sold in large supermarkets. The buyer also added that the French lingerie market is the largest in Europe, ahead of the UK and Germany.

It is understood that Vanity Fair Brands, which was acquired by Fruit of the Loom in 2007, is currently not profitable. Perceva will look to unlock the brands' potential and bring the group back to profitability via an organic growth strategy. In addition, it will consider potential bolt-on acquisitions.

Although financial details surrounding the acquisition remain undisclosed, the GP is believed to be financing the deal on an all-equity basis. It invested via its second fund, France Special Situations II, which closed on around €200m last year.

Company
Vanity Fair Brands Europe designs and distributes lingerie products across four brands – Variance, Lou, Vanity Fair and BestForm. It also operates a swimwear brand, Cherry Beach.

The group has a turnover of €55m and employs 300 people, split between its Paris headquarters and Barcelona.

People
President Jean-Louis Grevet led the deal for Perceva Capital.

Advisers
Equity - Clifford Chance (Legal).
Vendor – Societe Generale (M&A).

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• Topics
• France
• Consumer
• Turnaround/Special Situations
• France
• Perceva Capital
• Unq2015July