FSN reinvests in Active Brands alongside Verdane

FSN is reinvesting in the business through FSN Capital VI as majority owner, while exiting the 2017 investment made in it via its FSN IV fund. Verdane will hold a significant minority stake in Active Brands via its Verdane Edda II fund.

According to a press release, the co-investment has enabled a robust valuation process. Financial terms of the deal were not disclosed.

A source familiar with the matter told Unquote: "The sale process resulted in the partnership. There were discussions with several parties, among them Verdane. Verdane saw the attractiveness of the brand and realised that it could have a value add in the future growth of the company. Verdane also acknowledged that a partnership with FSN was an attractive opportunity to pursue due to FSN's great relationship with management, internationalization capabilities and industry know-how."

In the new ownership structure, FSN will hold approximately 55% of the shares and Verdane will have around 34%, while management will reinvest with around 5% and Holta Invest – the family office that founded Active Brands – will reinvest to hold just shy of 5%, according to the source familiar.

According to FSN's website, the GP's ownership in the company was at 68% in the original deal. At the time of that deal, management held a 20% stake, according to the source familiar with the matter.

According to the source familiar, the sponsors will support the company's continued international growth and M&A. The partnership will seek to build systems to professionalize the business and boost its digital efforts.

"The company has a very attractive future. It also requires more capital as there is a lot of M&A opportunities. Capital from both funds will ensure there is enough firepower to go after attractive premium sports brands," the source familiar said.

Under FSN's tenure, Active Brands was able to expand outside Norway. According to the press release, the company had sales of more than NOK 1.35bn (EUR 110m) in 2021. According to the source familiar, Active Brands has more than doubled its EBITDA since FSN's first investment. The sponsor has helped the company transition from a Norweigian brand incubator to a global brand accelerator.

Following its exit from Active Brands, Fund IV only has Fibo left in its portfolio as well as a smaller stake in Kjell & Company, which carried out an IPO last year.

FSN Capital VI started fundraising in July 2020 and closed in June 2021 on EUR 1.8bn, surpassing its target of EUR 1.5bn. The vehicle plans to make around 14-16 platform investments in companies that operate in the manufacturing, consumer, and business services sectors. The GP secured commitments from around 100 LPs which included global investors, pension funds, sovereign wealth funds, endowments and insurance firms, according to Unquote Data.

Verdane Edda II held a final close on EUR 540m in January 2021. The fund will follow the same strategy as its predecessor, investing between EUR 10m-150m in high-growth Nordic companies in the consumer internet and software sectors, according to Unquote Data. Current portfolio companies include Papirfly, a Norwegian cloud-based modular brand activation management software platform, as reported.

Previous funding
Active Brands was merged with Norwegian sports brand Skigutane in 2010 following backing from Norweigian investor Kjetil Holta. According to reports at the time, the Norwegian backer acquired 60% of Skigutane. 

Unquote's sister publication Mergermarket reported in November 2021 that FSN appointed Carnegie to assist it in the exit of Active Brands. The sale process was due to take place around the first quarter of 2022 and the company was marketed off expected 2021 EBITDA north of NOK 200m. The report also noted the company reported NOK 127m FY19 EBITDA, up from NOK 98m in FY18, with NOK 1bn and NOK 966m in revenues, respectively.

Company
Active Brands was founded in 2009 and is based in Oslo, Norway. Its portfolio includes Norway-based brands such as Kari Traa, Sweet Protection, Johaug, Dæhlie, Bula, Åsnes and Vossatassar. It has around 220-240 employees. 

CEO Christophe Merkel, joined Active Brands from Nike in March 2021. According to the source familiar, he will stay on under the new structure. On the board side, Michael Rupp, a former senior executive of Adidas and Reebok, executive advisor for FSN and chairman for last five years, will continue to be under the new structure. Board members from FSN and Verdane as well as two new hires will be joining under the new structure, according to the source familiar. 

People
Active Brands - Christophe Merkel (CEO).
FSN – Morten Welo (partner and COO), Eskil Koffeld (principal).
Verdane - Hanna Eiderbrant (principal).

Advisors
Vendor - Carnegie (M&A); PwC (financial, tax, ESG due diligence); Simonsen Vogt Wiig (legal); BCG (commercial due diligence).
Equity - Haavind (legal); Wiersholm (legal); EY (financial and tax due diligence).

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• Topics
• Buyouts
• Nordics
• Consumer
• Co-investments
• Verdane Capital Partners
• Norway
• FSN Capital
• Exclusive