China’s textile manufacturer Shandong Ruyi Technology Group is acquiring a controlling stake in French fashion group SMCP from global private equity firm KKR & Co. L.P. (NYSE:KKR), in a deal reportedly valued at 1.3 bln euros ($1.48 million) including debt.
SMCP’s founders and management are reinvesting alongside Shandong Ruyi Group as minority shareholders, while KKR will retain a minority interest in the group. The deal closing is subject to customary regulatory approvals.
KKR, which acquired a majority stake of SMCP in June 2013, had put SMCP on the market five months ago, hoping to fetch one billion euros ($1.14 billion), based on twice annual sales.
With three distinct contemporary Parisian fashion brands, Sandro, Maje and Claudie Pierlot, SMCP is a global leading company in the accessible luxury sector. SMCP operates 1,118 point of sales, of which 906 are directly operated and 212 are operated through partnerships. Its brands are present in 33 countries worldwide by the end of December 2015.
Evelyne Chetrite and Judith Milgrom founded Sandro and Maje in Paris, in 1984 and 1998 respectively and continue to provide creative direction for the brands. Claudie Pierlot was also founded in 1984 by Madame Claudie Pierlot, and acquired by SMCP in 2009.
“We have been highly impressed by the success of Sandro, Maje, and Claudie Pierlot and hold great respect for the founders and management of SMCP both for their passion and their achievement,” said Yafu Qiu, chairman of Shandong Ruyi Group. “This would be a significant step for Shandong Ruyi Group in our continued endeavor to become a leader in the fully-integrated textiles and fashion business both in China and globally.”
“My sister, Judith Milgrom, and I are delighted to embark on the next phase in the journey of our company alongside Shandong Ruyi Group,” said Evelyne Chetrite, founder and managing director of SMCP.
“After having announced record results for 2015, with 33% net sales growth, we are very excited by the opportunity to partner with Shandong Ruyi Group, who can support us in our global ambition,’ said Daniel Lalonde, president and CEO of SMCP.
“We have been very pleased with SMCP’s development over the past years and look forward to our continued partnership with the SMCP teams and founders, alongside Shandong Ruyi Group,” said Nicolas Gheysens and Edouard Pillot, directors at KKR Europe.
J.P. Morgan acted as exclusive financial advisor to Shandong Ruyi Group and as sole underwriter of the associated debt financing while Latham & Watkins acted as legal advisor to Shandong Ruyi Group.
Bank of America Merrill Lynch and UBS acted as financial advisors to SMCP and KKR, and Bredin Prat as legal advisor to KKR.
Shandong Ruyi Technology Group Co. Ltd, founded in 1972, is one of the largest textile manufacturers in China and ranks among the Top 100 Chinese multi-national enterprises. The group predominately engages in textile offerings and owns a fully-integrated value chain with operations spanning across raw materials cultivation, textiles processing, and design and sale of brands & apparel. Headquartered in Jining, Shandong, the hometown of Confucius and Mencius, Shandong Ruyi Group operates 13 domestic industrial parks and boasts some of the largest production lines and advanced technology in China. Shandong Ruyi Group also has a significant distribution and point of sales (POS) network that services a global customer base spread across 6 different continents. In Asia Pacific alone, the group operates over 3,000 POS. Shandong Ruyi Group has over 20 subsidiaries, with two listed subsidiaries in China and Japan respectively.
KKR, founded in 1976 and headquartered in New York City, is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world‐class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business. As of December 31, 2015, the firm had $120 billion in assets under management.
Photo: Évelyne Chétrite, founder of Sandro, and Judith Milgrom, founder of Maje, with senior management colleagues of SMCP and KKR. (Le Figaro)