Gant, the 3i-backed clothing manufacturer, has announced a €241m flotation on the Stockholm Stock Exchange. The deal will provide an opportunity for partial exits for L Capital, the investment arm of luxury goods manufacturer LVMH, and 3i, the UK-based private equity firm. It will generate proceeds of €76m for L Capital and €44m for 3i.
3i and L Capital led the €105m buyout of Gant in July 2003, with 3i investing €13m for a 20.6% stake and L Capital, which was already an investor, increasing its stake to 35.4% at that time.
Enskilda is bookrunner on the deal, with ABG Sundal Collier as co-lead manager. Pricing puts Gant on a P/E multiple of 15.5x for 2006 and 12.5x on an EV/Ebit basis. On a P/E basis, the pricing represents a 20% premium to Hugo Boss, the main comparable, and a 6% discount to Polo Ralph Lauren. Looking at EV/Ebit multiples, the discount to Boss is 11%.
The Gant brand was founded in the US in 1949, while the current operation was founded in 1980 by three Swedish entrepreneurs, Lennart Björk, Klas Käll and Staffan Wittmark, when they obtained the rights to design and sell Gant clothing in Sweden. In early 1999, the company acquired the global rights to the Gant trademark, securing control over Gant’s global product range.
In 2005, Gant generated turnover and operating profits of €116m and €21m respectively. Gant brand sales (the total estimated retail sales value before VAT of Gant branded products) amounted to €592m.