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Apax agrees $1.1bn take-private for Rue21 after 15-year holding period

23 May 2013

shirt-clothing-menswear-check-clothesLondon-based private equity firm Apax Partners has agreed to taken full ownership of its oldest existing investment through a $1.1bn take-private deal for teenage fashion retailer Rue21.

The firm, which first bought into Rue21 in 1998, agreed to pay $42 per share, which represented a premium of about 23 per cent to the company’s closing price yesterday.

Apax was already the company’s largest shareholder, with control of almost 30 per cent of the business through its SKM II funds.

John Megrue, CEO of Apax Partners US and partner in the firm’s retail and consumer team, said,  “We are very proud of the growth that Rue21 has achieved.

“I have worked closely with Bob Fisch to support the company’s growth from less than 100 stores at the time of the initial investment in 1998 to over 900 stores today, and Apax is excited to continue the journey with the Company’s senior management team.”

Rue21′s net sales were up by just over nine per cent in the quarter ending April 30, while comparable store sales decreased 4.6 per cent from the same quarter 12 months ago.

Rue 21 president, chairman and CEO Bob Fisch said, “This quarter Rue21 was impacted by the same challenges that affected the entire industry – unseasonably cool weather, higher payroll taxes and delayed tax refunds.

“All of these factors affected shopping patterns and resulted in a tougher quarter than we had forecasted in terms of sales growth.

“Looking ahead we expect both the weather and consumer spending to improve and believe our 2013 strategic initiatives, including opening 125 stores in 2013, will allow us to deliver consistent, strong profit growth to our stakeholders.”

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