(Reuters) – U.S. private equity firm Advent International plans to sell or spin off Takko Fashion, one of Germany’s largest and fastest-growing clothing chains valued at about 1.25 billion euros, the Financial Times said on Sunday.
An increasing number of price-conscious Germans have been turning to discount clothing stores and that has helped push up Takko sales 900 million euros this year through April. That’s up 28 percent since Advent bought the retailer three years ago for 770 million euros from buy-out rival Permira.
Advent has solicited eight investment banks for proposals to advise it on its options for Takko. It is expected to hire advisers next month to launch an auction, initial public offering or a dual-track sales process, the Financial Times said on its website.
Takko and Advent were not immediately available for comment.
Dresdner Kleinwort advised Advent when it bought the company and Goldman Sachs advised Permira, the Financial Times said.
The company, based in Telgte in northern Germany, was expected to generate at least 125 million euros in earnings before interest, tax, depreciation and amortisation (EBITDA) last year. Bankers said discount retailers were typically valued at 10-times EBITDA, putting Takko’s value at about 1.25 billion euros, the Financial Times said. (Reporting by Ilaina Jonas and Megan Davies; editing by Gunna Dickson)