LONDON — The private equity firm HMD Partners, based here, has sold its controlling stake in Escada AG to the Swiss finance group Finartis for an undisclosed sum — and has moved on to the next acquisition.
Abel Halpern, managing partner of HMD, confirmed that Finartis, an investment vehicle for the Russian investor Rustam Aksenenko, last month acquired control of the HMD holding company that owns the Escada shares.
Finartis had been a limited partner of HMD's in the Escada investment.
Halpern said the stake amounts to about 28 percent of the firm's stock, and is a controlling interest. The full terms of the deal have not been disclosed, although an industry source said HMD exited at a premium to current market values.
HMD, founded and run by Halpern, Federico Minoli and Peter Darrow, bought the Escada stake in 2003 with the aim of turning around the Munich company founded by Wolfgang Ley and his late wife, Margaretha Ley.
HMD invested about 45 million euros, or $57 million, in Escada, and the value of its investment rose to 130 million euros, or $164 million, during the three-year period. All figures have been calculated at current exchange.
Escada's market capitalization rose from 1 million euros, or $1.26 million, when HMD first bought its shares, to 250 million euros, or $315 million, at the time of the sale last month.
In the three-year period, earnings before interest, taxes, depreciation and amortization rose from a breakeven level to 65.1 million euros, or $82 million.
As reported, for the fiscal year 2005-2006, Escada expects to see a mid-single-digit sales gain. Sales in the prior fiscal year were 648.6 million euros, or $817.2 million. The label also foresees continued improvement of EBITDA.
In the first quarter, consolidated profits, after taxes and minority interests, rose to 6.2 million euros, or $7.8 million, from 5.9 million euros, or $7.4 million, in the prior period.
Escada's current management team will remain in place. Frank Rheinboldt is chief executive officer, Markus Schürholz is chief financial officer and Beate Rapp is chief operating officer."Escada now has a truly world-class management team," Halpern said.
Ley handed the baton to Rheinboldt earlier this year, and now works as a consultant for the company.
Halpern also confirmed that last September, HMD acquired 100 percent of Sinn Leffers, the German mid-market men's and women's fashion chain, from Karstadt Quelle. The transaction was valued in excess of 200 million euros, or $252 million.
The acquisition was made in conjunction with retail executive Peter Zhulsdorff, who is currently chairman of Escada. The deal was made via Zhulsdorff's Deutsche Industrie Holding.
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