Acne Studios said it will sell up to a 41 percent stake to private equity firm IDG Capital and I.T Group, confirming earlier WWD reports it was seeking buyers. Following the sale, founders Mikael Schiller and Jonny Johansson will retain a majority of the company’s shares.
IDG Capital intends to take up to 30.1 percent of the company, subject to regulatory approval, but no less than 25.1 percent. I.T Group will purchase a 10.9 percent share, paying 486.3 million Swedish krona, or $53.8 million at current exchange. The two buyers agreed to pay 1,297 Swedish krona or $143 at current exchange per share.
The purchase price implies a multiple of 18 on the company’s 2018 earnings before interest and taxes which was 247.5 million Swedish krona, or $27.4 million at current exchange.
I.T Group has a long history with Acne Studios helping to introduce the brand to Asian consumers in the early 2000’s. In addition to running I.T department stores, I.T Group serves as the Asia partner for fashion companies like Galeries Lafayette, Dover Street Market, Off-White, and No. 21.
IDG Capital’s previous fashion ventures include Farfetch, Gentle Monster, Moncler, Secoo, and Bosideng, as well as household Asian tech names Tencent, Baidu and Flipkart.
“This is a dream scenario for us,” said Mikael Schiller, chairman of Acne Studios. “Jonny and I are excited to join forces with new partners who we know well and who will bring further expertise for our continued journey. We look forward to collaborating with IDG Capital and I.T. Acne Studios will greatly benefit from their extensive know-how within fashion and the rapidly evolving universe of online and offline retail. By working together, we will make Acne Studios even more successful.”
It is understood Schiller’s plan is to step down a few years after a sale is complete.
The sale will see Öresund, Creades and PAN Capital, who jointly own the part of Acne Studios that was bought by Öresund in 2006, exit.
The Stockholm-based fashion house, which made its name for producing edgy denim, was founded in 1996 as a creative collective. It now stocks men’s and women’s wear in over 50 stores across the globe with annual revenues exceeding 200 million euros, however, multiple sources say the business has softened some over the last year.
“Acne Studios began as a niche brand and has evolved into a global fashion phenomenon with a unique point of view. In our 15 year partnership we have developed a strong kinship through shared thoughts on fashion, retail and entrepreneurship at large. We cannot wait to start the next chapter of this collaboration,” said Sham Kar Wai, founder and ceo of I.T Group.
Alexandre Quirici, partner at IDG Capital, said “We are pleased to join Jonny, Mikael and the Acne Studios team in this exciting new stage of development of the brand. Acne Studios is a pioneer in fashion and in using technology, which allowed the brand to build a global fan base. We are particularly excited about the growth of the brand and the many steps Acne Studios is taking towards realizing its full potential.”
Goldman Sachs International acted as sole financial adviser to Acne Studios on this transaction. Cederquist law firm acted as sole legal adviser.