Tøjeksperten (Denmark) - Jan 2008

unquote
01 January 2008

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Polaris Private Equity has wholly acquired Tøjeksperten, a Danish men’s clothing retailer, for an enterprise value of DKK 900m. Two-thirds of the chain owners agreed to sell to the GP, and a franchise arrangement has been arranged with the store owners who did not want to sell. The acquisition is part of Polaris’ strategy to consolidate the Danish and Nordic men’s clothing market. In 2007 the buyout house also acquired Wagner/Texman, with 100 retail outlets in the Nordics, 40 of which are in Denmark, and the two chains will be managed together to expand into the rest of the Nordic region, but under two different brand names and target groups. Marketing and production synergies will be realised with the new centralised system for the two merged groups. The new headquarters will be in Ålborg.

Deloitte held the auction where a few parties placed bids for the group, but Polaris started preparation for the acquisition in the summer of 2007 and presented the consolidation strategy for Tøjeksperten which appealed to the owners. Aside from the consolidation opportunities, the new owner was attracted to the opportunities in men’s clothing market and the prospect of operating the chain more effectively under a single ownership structure.

Debt structure

The debt structure to support the transaction has not been disclosed.

Company

Tøjeksperten has 119 retail outlets in Denmark. The chain consisted of individually managed retail outlets with approximately 700 employees. The group was founded in 1968 and was headquartered in Roskilde. Turnover for 2006 was DKK 1.1bn including VAT and it sells brand names such as Esprit, Gant, RedGreen, Signal Cottonfield as well as its own brands such as Morgan and Morgan Exclusive.

People

Polaris Private Equity managing partner Jan Johan Kühl worked on the deal and will join the board of directors, and Polaris is in the process of appointing external board members. Michael Døssing is the chairman of the company.

Advisers

Equity - Copenhagen Consulting Company, Jens Høgsted (Commercial Due Diligence)Equity - Gorrissen Federspiel Kierkegaard, Finn Møller Kristensen (Legal)Equity - Grant Thornton, Jan Hetland Møller (Financial Due Diligence)Vendor - Deloitte, (Financial Due Diligence)

Sourced from: Nordic unquote" 71 (Feb 2008)