A wolf in wolf’s clothing

Jack Wolfskin, the Germany-based global retailer of outdoor clothing and equipment, is apparently on the verge of going through its third change of ownership in nine years. Nothing particularly unusual in that, I hear you say, except for the fact the company is supposedly being lined up to be sold by its current private equity backers to yet another private equity house.

The company, whose logo encompasses a paw print (presumably that of a wolf), started out life as a subsidiary of the US group Johnson Outdoors. It was initially sold to Bain Capital back in September 2002 for a relatively modest amount, reported as $63m. Then in April 2005 Bain exited and sold the company to Quadriga Capital and Barclays Private Equity for the reported amount of $120m. Taking the deal consideration at face value, as there is little else available publically to measure, this is a good return by any standards given the deal was invested and exited before the really frothy valuations and crazy prices that started to be seen from late 2005 onwards.

Currently the values being bandied about in the press are in the region of $1bn (the price being considered by the interested private equity parties being linked to the company). If such a price was achieved this would be significant return on investment and one which the LPs and GPs at the incumbent private equity firms would undoubtedly be pleased about – even if the investment has been held nearly six years.

The company has posted five years of consecutive revenue growth, has expanded rapidly in terms of the number of stores it has globally and seems to have weathered the economic downturn very well.

This potential deal once again proves that whilst private equity firms have money to invest (and we know they do given the dearth of activity in 2008 and 2009) good strong portfolio companies are just too tempting to resist.

Filed under: retail, PE