Palamon Capital Partners said Jan. 16 that it acquired a majority stake in Happy Socks. The transaction values Happy Socks at SEK 725 million ($80.9 million) with SEK 40 million ($4.4 million) of growth capital injected into the business, giving Happy Socks an enterprise value of SEK 765 million ($85.4 million). Happy Socks, of Stockholm, is a brand of designer socks.
Palamon Capital Partners (“Palamon” or the “Firm”), a pan-European growth investor, has acquired a majority stake in Happy Socks (“The Company”), a leading international brand of design socks. The transaction values Happy Socks at SEK 725 million, with SEK 40 million of growth capital being injected to support the continued expansion of the business, leading to a SEK 765 million post-money enterprise value.
Founded in 2008 in Sweden by Mikael Söderlindh and Victor Tell, the Company’s mission is to spread happiness by turning an everyday essential into a colourful design piece with a high standard of quality, craftsmanship and creativity. Happy Socks is a globally recognised brand sold in more than 90 countries through more than 10,000 points of sale, supported by a fast growing online channel and an expanding portfolio of own-branded retail stores.
The Company has disrupted the global sock wear market by offering high quality, attractively priced, colourful patterned socks promoted through creative point of sale displays, celebrity collaborations and a strong social media presence. Happy Socks has achieved more than 50% revenue and EBITDA annual growth over the last three years, generating retail sales of €100 million in 2016.
Following the transaction, the founders will remain actively involved in the Company.
Ali Rahmatollahi, Partner of Palamon Capital Partners, said, “Happy Socks is a phenomenal company with a very distinctive brand DNA that resonates with consumers around the world. Palamon’s investment stems from the Firm’s ongoing effort to identify well-positioned European specialty retail brands with strong growth potential in a global market.”
Ricardo Caupers, Partner of Palamon Capital Partners, said, “We are delighted to be investing in Happy Socks, the original fashion sock brand offering high-quality socks for every occasion, mindset and style. We are thrilled to partner with founders Mikael Söderlindh and Victor Tell and look forward to supporting Happy Socks in fulfilling its global growth potential.”
Mikael Söderlindh, Co-Founder of Happy Socks, commented, “In the last two years Happy Socks has grown beyond our expectations. We have transformed the company into a real growth engine by strengthening our operational platform and our global presence. We have achieved the best of both worlds by securing a strong new partner in Palamon and remaining significant owners in a great business that we will continue to build in the years to come.”
Palamon’s previous investments in the specialty retail sector include: dress-for-less, a German online retailer for designer apparel; feelunique.com, the leading pure-play online retailer of premium beauty products in the UK; Il Bisonte, the Italian leather goods brand and The Rug Company, a leading global brand in luxury handmade rugs.
Palamon’s investment strategy targets founder-led, service sector businesses across Europe with the potential to capture the shift in consumer demand toward authentic, high quality and well-priced products and grow revenue at more than 20% per annum.