Authentic Brands Group sells equity stake; company valued at $12.7 billion

Authentic Brands Group is delaying its planned initial public offering and instead selling major equity stakes in its business to two private equity firms and a group of existing stakeholders.

The deal values the retail conglomerate, whose portfolio of 30-plus brands includes Forever 21, Brooks Brothers, Aeropostale, Barneys New York and others, at $12.7 billion in enterprise value. The private equity firms taking the stake are CVC Capital Partners and HPS Investment Partners.

Founded by Jamie Salter in 2010, Authentic Brands will complete one of its biggest deals yet early next year: its $2.5 billion acquisition of Reebok from Adidas. The acquisition will bring Authentic Brand’s portfolio to more than $20 billion in annual system-wide sales.

The company is also negotiating to purchase a fashion brand in the first quarter of 2022, Salter told WWD. The report also said that Authentic Brands will push its now-shelved IPO to 2023 or 2024.

“We have known CVC and HPS for many years and are thrilled that they are coming on board as significant stakeholders in ABG,” stated Salter, who serves as chairman and CEO and is the largest individual shareholder in the business,” said Salter. “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.”

Upon closing of the transaction, which is expected in December 2021, CVC and HPS will join Authentic Brand’s board.

“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.”

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 and Shaquille O’Neal will continue to hold significant equity positions in the company.