28 May 2020
Zeus Capital has advised listed fast fashion giant boohoo on its acquisition of the remaining 34 per cent of shares in Pretty Little Thing (PLT) for an initial consideration of £269.8m which could potentially rise to £323.8m dependent on share price performance. The acquisition is expected to be significantly earnings enhancing on a fully diluted basis with immediate effect.
Founded in Manchester in 2006, boohoo is an inclusive and innovative fashion e-commerce brand targeting young, value-orientated customers. Since completing a £550m IPO in 2014, again led by Zeus Capital, boohoo has grown rapidly in the UK and internationally, with a current market capitalisation in excess of £4.5bn.
By acquiring the remaining 34% stake in PLT today, the Group is taking an important further step towards achieving its vision to lead the fashion e-commerce market globally by accelerating full ownership of a brand that is in high growth with enormous growth potential ahead of it, in a transaction that creates significant value for the Group’s shareholders. After this acquisition and with its growing platform of wholly owned, innovative fashion brands, the Group believes it can continue to successfully disrupt the international markets it operates in today, whilst retaining a strong balance sheet in order to take advantage of numerous M&A opportunities that are likely to emerge in the global fashion industry over the coming months.
Since the group acquired its initial 66 per cent stake in PLT in January 2017, the brand has benefitted significantly from the enlarged group’s multi-brand platform. Net sales have soared in the three years since – from £55m in the year ending 28 February 2017 to £516m in latest financial year, which represents a CAGR of 111% in this timeframe. In the last financial year, PLT’s adjusted after tax profit totalled £47.2 million.
PLT’s senior management team – Umar Kamani and Paul Papworth – will remain in their current roles and will continue focusing on developing PLT into a global fashion brand.
The team at Zeus Capital, comprising of Nick Cowles, Benjamin Robertson, Andrew Jones and Josh Bean acted as adviser on the transaction.
Umar Kamani, Founder & CEO of PLT commented: This deal represents another milestone in our journey at PLT. Since being a disruptive start-up in 2012 to a global fashion brand that generates over half a billion pounds in sales today, I am incredibly proud of what my team and I have achieved in such a short period of time. The team and myself have big ambitions for the brand, and I’m incredibly excited about what the future holds for PLT as it embarks on the next stage of its global journey as a fully-owned part of the boohoo group.
Nick Cowles, director of corporate finance at Zeus Capital, said: We are delighted and proud to be continuing to support boohoo as the group continues to go from strength to strength. Although every business is currently facing challenges during the current climate, working with a company (boohoo) which is thriving and expanding on its exciting journey is fantastic for Zeus Capital. We continue to demonstrate we are able to support ambitious and growing businesses.