Apax Partners, Bain Capital, EQT, TPG May Pursue Clothing Chain Takko – Sources

Takko is expected to attract at least four buyout shops, people familiar with the matter told Reuters. Apax Partners, Bain Capital, EQT and TPG are preparing proposals to take one of the Garmany’s largest clothing chains from Advent International. A another source told Reuters an initial public offering is also being considered.

(Reuters) – At least four private equity firms were expected to place first round offers this week for leading German budget fashion retailer Takko, people familiar with the matter said.

Apax Partners, Bain Capital, EQT and TPG [TPG.UL] are preparing bids for the business, owned by rival buyout firm Advent International, two of the people said. An initial public offering is also under consideration, a third source said.

Bankers said discount retailers were typically valued at 10 times earnings before interest, tax, depreciation and amortisation (EBITDA), valuing Takko at about 1.25 billion euros ($1.75 billion).

A growing number of price-conscious Germans have been turning to discount clothing stores, helping to boost sales at Takko, one of the country’s largest and fastest-growing clothing chains, to 900 million euros in the year to end-April.

An estimated 25 percent of German adults have purchased its products in the last year, according to Advent’s website.

Takko is the latest in a series of European companies owned by private equity firms that are close to changing hands in a so-called secondary buyout, or a return to the public market, as owners look to cash out of their best performing investments.

Advent, which bought the business in 2007 from Permira [PERM.UL] for 770 million euros, plans to sell or spin off the business by early next year, a source said in August. [ID:nLDE57F0X0]

Takko declined to comment. The private equity firms declined to comment or had no immediate comment.

(Reporting by Victoria Howley, Quentin Webb and Simon Meads in London and Arno Schuetze in Frankfurt; editing by Steve Slater and Louise Heavens)

($1=.7158 Euro)