LVMH’s L Capital in PE merger deal
In a marriage of high fashion and finance, a new partnership is being formed by luxury products company LVMH with two equity firms, Catterton and Groupe Arnault.
They have agreed to create L Catterton, combining private equity firm Catterton’s North and Latin American interests with LVMH and Groupe Arnault’s European and Asian private equity and real estate interests, now under the Singapore-based L Capital and the L Real Estate banners. Under the terms of the agreement, L Catterton will be 60 per cent owned by the partners of L Catterton and 40 per cent jointly owned by LVMH and Groupe Arnault.
This will make L Catterton the largest global consumer-focussed investment firm with six distinct and complementary fund strategies specialising on consumer buyout and growth investments across Asia, Europe, and North and Latin America, as well as prime commercial real estate globally. After various successor funds are closed, L Catterton expects to grow its assets under management to more than $12 billion, drawing on 27 years of experience with more than 120 investment and operating professionals in 17 offices across five continents. It will be led by global co-CEOs J. Michael Chu and Scott A. Dahnke, currently managing partners at Catterton.
“The breadth of our collective expertise will be second to none in the consumer industry,” says Chu. “And we look forward to benefitting from the strength and global reach of the team at L Capital and L Real Estate as we continue to seek out investment opportunities with significant growth potential.”
“The globalisation of media and technology, combined with increasingly permeable geographic borders, is driving rapid consumer growth on an unprecedented global scale,” said Dahnke.
Catterton invests in all major consumer segments, including food and beverage, retail and restaurants, consumer products and services, consumer health, and media and marketing services. Its investments include CorePower Yoga, Kettle Foods, Nature’s Variety pet food, Noodles & Company, Outback Steakhouse, PF Chang’s, Plum Organics, Restoration Hardware, Protein Bar, Snap Kitchen, Sweaty Betty and Wellness pet food.
L Capital invests in companies across Asia and Europe in such sectors as beauty and wellness, fashion and accessories, food and beverage, media and entertainment, and special retail. Founded in 2001 with support from LVMH and Groupe Arnault, it specialises in lifestyle brands and selective retail businesses in Europe. L Capital – Asia is Asia’s largest consumer-focussed private equity firm with headquarters in Singapore, and regional offices in Hong Kong, Melbourne, Mumbai and Shanghai. Its investments include 2XU, Asiaray Media, Bateel, Charles & Keith, Emperor Watch & Jewellery, Jones the Grocer, Marubi and Sasseur.
L Real Estate develops mixed-use projects anchored by luxury retail. Its investments include G6 in Ginza, Tokyo, and Miami Design District.
LVMH (Moet Hennessy Louis Vuitton) is represented in fashion and leather goods by a portfolio of brands including Celine, Donna Karan, Fendi, Givenchy, Kenzo, Loewe, Louis Vuitton and Marc Jacobs. Its wines and spirits division includes Belvedere, Chandon, Cloudy Bay, Dom Perignon, Hennessy, Krug, Moet & Chandon and Wenjun. In the perfumes and cosmetics sector it has Guerain, Parfums Christian Dior, Parfums Givenchy, Parfums Kenzo and Perfumes Loewe.
LVMH’s retail interests include DFS, Le Bon Marche and Sephora, it has a joint venture with De Beers Diamond Jewellers, and its watches and jewellery division comprises Bulgari, Chaumet, Dior Watches, Hublot, TAG Heuer and Zenith.
Subject to customary regulatory and certain investor approvals, the L Catterton transaction is expected to close early this year.