CNBC has discovered that retail giant Authentic Brands Group intends to postpone its $10 billion planned valuations in its first initial public offering, in favor of selling large ownership shares in the business to private equity firm hedge fund HPS Investment Partners, CVC Capital, and a pool of current stakeholders.The transaction is valued at approximately $12.7 billion and is likely to be revealed on Monday, according to the business.
Among the firms in Authentic Brands’ portfolio include department store chain Barneys New York, clothing stores Forever 21 and Aeropostale, men’s suit maker Brooks Brothers, and Sports Illustrated magazine.
The company’s plan to buy sneaker producer Reebok is expected to finalize early 2022, adding another brand to its portfolio.
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According to CNBC, the deal with CVC and HPS is anticipated to finalize in December, after which the private equity firm and hedge fund will each maintain a seat on Authentic Brands’ board of directors.According to the company, BlackRock will maintain its position as Authentic Brands’ largest shareholder, which it has had since 2019. Existing investors, including General Atlantic, Simon Property Group, Leonard Green & Partners, Brookfield, and basketball star Shaquille O’Neal, will maintain their stakes.
When it filed to go public in July, Authentic Brands said that its net income in 2020 increased to $211 million from $72.5 million the previous year, while revenue increased by around 2% to $489 million.
Authentic Brands CEO and founder Jamie Salter state stated that he has agreed to continue as CEO for another five years.
Jamie Slater is Canadian. He began his career in the 1980s promoting sporting products. He co-founded the snowboard company Ride which two years later, in 1994, went public on the Nasdaq.
Salter is a co-founder of Hilco Consumer Capital, Hilco Trading LLC’s private equity division. In 2010, he quit Hilco to launch Authentic Brands Group. The corporation obtains brand name rights and controls cultural icons such as Elvis Presley, Michael Jackson, Marilyn Monroe,and Muhammad Ali. Within six years, he had grown it to a $1.5 billion firm and established himself as a brand specialist.