Wrap Text
Brait’s acquisition of a c.90% interest in New Look
Brait SE
(Registered in Malta as a European company)
(Registration No.SE1)
Share code: BAT ISIN: LU0011857645
Share Code: BATP ISIN: MT0000680208
(“Brait”)
BRAIT’S ACQUISITION OF A c.90% INTEREST IN NEW LOOK
1. Introduction
Shareholders in Brait (“Shareholders”) are advised that Brait’s
wholly owned subsidiary, Brait Mauritius Limited, has entered
into an agreement to acquire a c.90% interest in New Look Retail
Group Limited (“New Look” or “the Company”) for c.GBP780 million,
primarily from funds advised by Permira and Apax (“the
Acquisition”).
2. Overview of New Look
Founded in 1969, New Look is a leading fast fashion multichannel
retailer operating in the value segment of the UK clothing and
footwear market with a growing international presence. New Look
aims to offer an exciting shopping experience and the latest
trends in fashion, catering for a broad spectrum of ages from
early teens to over 45’s. New Look’s core target audience is
fashion-conscious 16 to 35 year old women. According to Kantar
Worldpanel for the 24 weeks ending March 2015 the Company is the
leading retailer by value in the under 25’s womenswear and teens
(age 9 – 15) market in the UK. In the 52 weeks ending December 21
2014, approximately 14.1 million people in the UK made a purchase
from New Look, with approximately 43% of female adults and
teenagers in the UK shopping at New Look at least once in 2014.
In addition, New Look is expanding its menswear offering, with
the aim of growing menswear sales and market share.
New Look’s average time from product design to store delivery is
approximately 13 weeks, with some key high fashion items
delivered in less than 2 weeks.
New Look operates a multichannel model which, as at 28 March 2015,
comprised:
- 809 New Look stores, including 569 directly operated stores in
the UK, with a broad geographical coverage;
- 135 directly operated stores principally in China, France,
Poland, Ireland and Belgium and concession stores in Germany
and the Netherlands and 105 franchise stores in the Middle
East, North Africa, Europe and Asia;
- an own e-commerce platform serving customers in over 100
countries across the globe; and
- a third-party e-commerce platform through which it sells
products on websites of 11 third-party e-commerce retailers,
including ASOS and Zalando, which currently serve in the
aggregate approximately 200 countries.
Revenue and EBITDA for the 12 months to December 2014 are
GBP1.399 billion and GBP211 million, respectively. New Look
reported revenue of GBP1.392 billion and EBITDA of GBP204 million
for the financial year ended March 2014. This compares to revenue
of GBP1.355 billion and EBITDA of GBP184 million for the
financial year ended March 2013. Numbers for the financial year
to March 2015 are expected to be released to New Look’s
bondholders on 2 June 2015.
3. Rationale for the Acquisition
New Look is positioned in the fast fashion value segment of the
apparel market which is driven by a number of factors including:
- Increasing consumer demand for more affordable fashionable
clothing and consequent popularity of value retailers;
- Improvements in the supply chain, making fashionable clothing
more available; and
- Growth in demand and supply associated with increasing
popularity of e-commerce, providing a wider selection of
products as compared to stores and making shopping easier for
consumers.
New Look is attractive to Brait for the following reasons:
- Demonstrated double digit EBITDA growth in recent years;
- Solid cash flow generation;
- Established UK footprint exposed to the higher growth value
segment of the apparel and accessories market;
- Leading UK market value share: No. 2 overall womenswear and No. 1
among under-25 womenswear;
- Strong growth prospects in France, Germany, Poland and especially
China which is a priority market;
- Strong brand awareness in particular amongst women in the UK;
- Well-developed multi-channel offering via traditional stores and
a fast growing e-commerce platform incorporating ‘click and
collect’;
- The scale and efficiency of New Look’s fast fashion operating
model from source to customer (via shop-floor or e-commerce) is
difficult to replicate;
- Well-invested infrastructure and systems including a state-of-
the-art distribution centre; and
- Partnering with an experienced, aligned and proven management
team, and with the founder of the business.
4. Summary of the key terms of the Acquisition
Brait will acquire a c.90% interest in New Look, primarily from
funds advised by Permira and Apax. The founder’s family interests
and the existing management team will be reinvesting alongside
Brait for c.10% shareholding.
The Acquisition values New Look at an enterprise value of
c.GBP1.9 billion. The estimated consideration payable by Brait of
c.GBP780 million for a c.90% interest takes into account
estimated transaction costs, but may be adjusted up or down
depending on actual transaction costs (“Purchase Consideration”).
Brait will fund the Purchase Consideration using facilities and
cash on hand.
New Look has net financial debt of c.GBP1 billion. Brait and
management are comfortable with the Company’s current leverage
ratio given its strong cash flow generation. Subject to market
conditions, the Company will review financing alternatives in
order to optimise the capital structure within a similar leverage
range.
5. Conditions precedent
The Acquisition is not subject to any regulatory approvals. The
completion date for the Acquisition is 25 June 2015.
Malta
15 May 2015
Brait’s primary listing is on the Euro MTF market of the Luxembourg
Stock Exchange and secondary listing on the Johannesburg Stock
Exchange.
Joint Investment Banks to Brait
Rand Merchant Bank, (A division of FirstRand Bank Limited)
Nomura International plc
United Kingdom attorneys
Linklaters
South African attorneys
DLA Cliffe Dekker Hofmeyr
European legal advisor
M Partners S.à r.l. (A member of Maitland Legal)
Sponsor to Brait
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 15/05/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
