Luxury brand owner and retailer LVMH has paid $75 million for a 40 per cent stake in compression wear brand 2XU through L Capital Asia, a $1 billion private equity fund its sponsors.
The deal values the 2XU at $166 million, or roughly 2.5 times it $65 million in annual sales. The Melbourne, Australia-based company will use proceeds from the investment to expand into Asia, Europe and the United States, where it is known among triathletes, cyclists, runners and a growing array of other athletes. 2XU’s line ranges from $60 T-shirts and $800 wet suits.
LVMH Group, Groupe Arnault and YTL Corporation Berhard established L Capital Asia in 2009 to capitalize on the high consumption growth in Asia. L Capital Asia closed its first $635 million fund in 2010 and typically takes minority stakes in portfolio companies within the aspirational segment, and has a pre-defined exit objective following an investment horizon of approximately four to five years. LVMH, a Paris company that owns the Christian Dior, Louis Vuitton, Givenchy and Moet Hennessy luxury brands and operates more than 3,000 stores worldwide, typically takes majority stakes in companies in the luxury end of the market, with a longer term view.
2XU was founded in 2005 Clyde Davenport, triathlete James Hunt and sales and marketing specialist Aidan Clarke. The investment by L Capital investment will cut the trio’s stake in the company to 42 percent and Lazard Australian Private Equity’s stake to 18 from 30 percent.
