Private equity's ravenous appetite for consumer goods companies may be fueling
the rumors that
Apax
Partners is preparing a bid for Adidas. Shares of German sportswear group
Adidas AG jumped Wednesday, April 18, to a record high amid rumors of an
impending private equity approach. But the stock later cooled as analysts
weighed in skeptically and the companies remained mum.
While an Apax purchase of Adidas may only be a dream, PE firms are involved
with other consumer goods companies. Buyout firms reportedly are eager
to
acquire Wilton Industries, which is on the auction block. Bids are
expected Wednesday for the baking paraphernalia maker from GTCR Golder Rauner
LLC and Warburg Pincus — both firms are active in the consumer goods
market. GTCR's bid would likely come through portfolio company EK Success
Ltd., which sells scrapbook supplies and other crafts items, and Warburg's bid
would likely come via portfolio company Jarden Corp., whose brands include Mr.
Coffee and Crock-Pot.
Craft companies like EK Success are of particular interest among private
equity firms. During the past few years, buyout firms have made several
investment in crafts companies. The biggest was Bain Capital LLC and
Blackstone Group LP's $6 billion LBO of arts and crafts retailer Michaels
Stores Inc. But there have been many smaller, midmarket deals as well.
Boston-based Advent International Corp. bought Centerville, Utah-based
scrapbook company Making Memories Wholesale Inc. from Peterson Partners LP, a
Salt Lake City private equity firm, for an undisclosed price in May 2005.
The interest in the sector is not surprising based on returns that some firms
have made on consumer goods bets. Fenway Partners reportedly
has
made a 100% internal rate of return on its $101.5 million investment in
American Achievement Corp., a class ring maker and yearbook publisher.
At The Deal's PC Symposium April 23-24, the retail/consumer sector will
command its own panel. The Carlyle Group's Pauline Brown, LNK Partners' Henry
Nasella, Brentwood Associates' Anthony Choe and Vestar Capital founder Daniel
O'Conner will discuss PE funding trends in retail and perhaps reveal future
targets. —Matthew Wurtzel
See
Adidas story from TheDeal.com
See
Wilton story from TheDeal.com
See
American Achievement story from The Deal
See
PC Symposium Web site
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