CVC Capital Partners and HPS Investment Partners have agreed to acquire significant equity stakes in Authentic Brands Group, a brand development, marketing and entertainment company. The transaction puts ABG at a valuation of $12.7 billion. Moving forward, BlackRock will retain its position as ABG’s largest shareholder, while 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.
Authentic Brands Group (ABG), a global brand development, marketing and entertainment company, today announces that funds advised by CVC Capital Partners (CVC) and HPS Investment Partners (HPS) have signed definitive agreements to purchase significant equity stakes in the company from certain current ABG shareholders. The transaction values the company at $12.7 billion in enterprise value.
“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,” said Jamie Salter, Founder, Chairman and CEO of ABG. “The entire ABG team – from our leadership to the director of first impressions – has done an incredible job of building a sustainable and scalable business with a laser focus on brand development, digital innovation, e-commerce, specialty retail, expansion into new verticals and proven business models.”
Since its founding in 2010, ABG has experienced significant growth by implementing a proven playbook that connects strong brands with best-in-class licensees and a network of partners to optimize value in the marketplace. ABG’s portfolio has grown to more than 30 brands that are diversified across the fashion, luxury, outdoor, home, entertainment, events, media and fine arts sectors. The acquisition of Reebok, which closes in Q1 of 2022, will bring ABG’s portfolio to more than $20 billion 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.
“The investments from CVC Capital and HPS Investment Partners are a strong vote of confidence in ABG’s long-term vision and strategic approach,” said Nick Woodhouse, President and CMO of ABG. “We are primed to continue furthering our global presence, acquiring new entertainment and lifestyle brands and driving organic growth for our portfolio.”
“We have followed ABG’s success story for several years and are delighted to be partnering with the company and its investor group,” said Chris Stadler, a Managing Partner at CVC. “The power of the ABG platform is evident in its growth to date, and we believe the company is only beginning to realize 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.”
“ABG has shown that its unique business model can successfully innovate and grow brands across a broad spectrum of consumer categories, and we are excited to leverage CVC’s experience in the consumer, retail and media and entertainment sectors to support the company’s growth ambitions,” said Chris Baldwin, a Managing Partner at CVC. “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.”
“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,” said Scot French, a Governing Partner of HPS.
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.
In connection with the transaction, BofA Securities, Inc. was the M&A advisor for ABG. BofA Securities, Inc. and Goldman Sachs & Co. LLC also acted as financial advisors for ABG. Latham & Watkins LLP acted as legal counsel for ABG.
Upon closing of the transaction, which is expected in December 2021, CVC and HPS will join ABG’s Board of Directors.