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November 22, 2021

Authentic Brands Group sells US$12.7bn stake to private investment firms

Global brand development company Authentic Brands Group has sold a significant stake in its business to private equity firm CVC Capital, hedge fund HPS Investment Partners and a number of existing stakeholders in a US$12.7bn deal.

By Laura Husband

Authentic Brands Group said its decision to offer a large stake of its business to private investment firms with signed definitive agreements is based on its next phase of global growth.

The stakes in the business will be shared with a number of private equity and investment firms, including BlackRock Long Term Private Capital, Simon, General Atlantic, Leonard Green & Partners and ABG’s other equity partners.

The transaction values the company at US$12.7bn in enterprise value, however this news is a U-turn on the company’s original plan to have an initial public offering (IPO), which it announced in July 2021. 

Jamie Salter, founder, chairman and CEO of ABG explained: “We have known CVC and HPS for many years and are thrilled that they are coming on board as significant stakeholders in ABG. Their commitment is a testament to the exceptional work our team has put forth as well as CVC and HPS’s confidence in our future growth.”

Nick Woodhouse, president and CMO of ABG added: “The investments from CVC Capital and HPS Investment Partners are a strong vote of confidence in ABG’s long-term vision and strategic approach.”

ABG, which was founded in 2010 has enjoyed significant growth by implementing a playbook that connects strong brands with best-in-class licensees and a network of partners to optimise value in the marketplace.

ABG has grown to more than 30 brands that are diversified across the fashion, luxury, outdoor, home, entertainment, events, media and fine arts sectors.

ABG said in a statement that its latest acquisition of Reebok, which closes in Q1 of 2022, will bring ABG’s portfolio to more than $20bn in annual system-wide retail sales with global distribution in more than 150 countries and highlights ABG’s ability to successfully integrate world-class brands into its unique platform. 

Chris Stadler, a managing partner at CVC said: “The power of the ABG platform is evident in its growth to date, and we believe the company is only beginning to realise the full benefit of its scale and diversification. We look forward to working with Jamie, Nick and the talented team at ABG to create even greater value together.”

Chris Baldwin, a managing partner at CVC explained: “We plan to work closely with the ABG team to execute on their strategic priorities, particularly around international expansion, given our extensive global footprint and experience in local markets around the world.”

While Scot French, a governing partner of HPS added: “We are thrilled to partner with Jamie and his outstanding team, who we have known for nearly a decade, to support ABG’s ongoing development and growth strategy as it continues to lead the market in the brand licensing arena, underpinned by a highly differentiated and innovative acquisition and brand management platform.”

BlackRock Long Term Private Capital will retain its position as ABG’s largest shareholder, which it has held since 2019. Simon, General Atlantic, Leonard Green & Partners, GIC, Brookfield, Lion Capital, Jasper Ridge Partners and Shaquille O’Neal will continue to hold significant equity positions in the company.

When the transaction closes, which is expected in December 2021, CVC and HPS will join ABG’s board of directors.

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