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U.S. Equity Firm to Buy Zadig & Voltaire Stake

Boston-based TA Associates is buying 30 percent of the French brand, according to a market source.

Outside the Zadig & Voltaire storefront.

PARIS — U.S.-based private equity and buyout firm TA Associates is acquiring 30 percent of French contemporary brand Zadig & Voltaire in a mezzanine investment worth 180 million euros, or $235 million at current exchange, a market source said Monday.

This story first appeared in the April 17, 2012 issue of WWD.  Subscribe Today.

The deal caps lengthy negotiations with Zadig & Voltaire founder and owner Thierry Gillier, who had previously rejected offers to buy into his rapidly expanding company from funds including LVMH Moët Hennessy Louis Vuitton–backed investment vehicle L Capital Management, the source said.

Gillier declined to comment. The executive recently told WWD that despite receiving investment propositions on a regular basis, he was determined to keep the brand independent. Officials at Boston-based TA Associates could not be reached, as the office was closed for Patriots’ Day.

TA Associates is paying a multiple of 12 times earnings before interest, taxes, depreciation and amortization to buy the stake from ZV Holding, the holding firm for the Paris-based label famous for rocker-chic staples like washed-leather biker jackets and distressed T-shirts, the source said.

Zadig & Voltaire has declined to provide detailed sales figures but said it expects revenues in the region of 300 million euros, or $392 million at current exchange, in the financial year ending July 2012.

The brand operates 150 boutiques worldwide, half of which are in France. Between 30 and 40 openings are planned for this year in international markets, including a 2,000-square-foot store on Madison Avenue in New York City, scheduled to open in late April or early May.

TA Associates is not a complete newcomer to the apparel industry. In November 2006, it bought a minority stake in now-defunct retail chain Steve & Barry’s, and, in 2007, it acquired a majority stake in 5.11 Tactical, a manufacturer and distributor of apparel and accessories destined primarily for law enforcement personnel.

Since April 2010, it has held a majority stake in British lifestyle brand Cath Kidston, known for its household goods and tote bags featuring vintage-inspired prints.

The transaction underscores the rapid growth in recent years of French fashion labels with an “affordable luxury” positioning such as Sandro, Maje and The Kooples, which has made them a prime target for investors looking for high returns. Last year, The Kooples sold a 20 percent stake to private equity fund LBO France for an undisclosed sum in order to fund international development.

That investment came on the heels of the 2010 sale of a 51 percent stake in Groupe SMCP — which controls French contemporary brands Sandro, Maje and Claudie Pierlot — to L Capital and Florac, an investment fund owned by the Louis Dreyfus family.