Birkenstock struck a deal to sell a majority share of Birkenstock Group to private equity firm L Catterton and its affiliates with the inclusion of Financière Agache, Bernard Arnault’s family investment company.
The deal comes after reports arrived in mid-January that Birkenstock was in advanced discussions to be acquired by CVC Capital Partners, another private equity firm. L Catterton, an international consumer-focused private equity firm backed by LVMH, has roughly $23 billion of equity capital throughout its fund strategies and 18 offices globally.
Details of the agreement and the acquisition price are not disclosed due to confidentiality agreements between all parties. The transaction is subject to the usual antitrust audits.
According to a press release, the two brothers Christian and Alex Birkenstock and Birkenstock management are entering this strategic partnership after carefully examining all options. The Birkenstock brothers will retain a stake in the company.
Birkenstock said the expansion of the company’s shareholders is the next logical step for Birkenstock to facilitate further strong growth in future growth markets such as China and India. In Europe and America, Birkenstock will further expand its leading market position by investing in the German sites and expanding production, logistics and sales operations. At the same time, the company plans to invest in the further development of its direct-to-consumer business and the expansion of its e-commerce platforms.
The move comes at a time when Birkenstock “is performing better than ever before in its 250-year history.” Since the formation of the Birkenstock Group under the leadership of Oliver Reichert and Markus Bensberg, the first non-family CEOs, in 2012, Birkenstock has seen double-digit sales growth every year.
Birkenstock also recently reported another record year last year despite the impact of the pandemic. In order to accommodate the strong growth, the Birkenstock CEOs recently launched a comprehensive investment offensive that includes expanding production capacity at the world’s largest manufacturing site in Görlitz and strengthening all of the other production sites in Germany.
Oliver Reichert, CEO of the Birkenstock Group, said: “In L Catterton and Financière Agache we have found not just shareholders, but also partners for achieving our global growth ambitions. They have a great deal of know-how and excellent access to international markets. Both future partners share our growth strategy; for our products to be represented in all international markets and in all channels, while maintaining our long-standing traditions and the unique offer of quality and sustainability “made in Germany”. We enter this partnership with both our traditions as a family business and a commitment to our roots and our employees front-and-centre. Today marks a quantum leap into the next chapter of our success story. However, we can only write this new chapter thanks to the great work and tireless dedication of all our employees.”
Christian and Alex Birkenstock said: “For the next 250 years we need partners sharing the same strategic and long-term vision as the Birkenstock family. In L Catterton and Financière Agache, we have found those partners. They bring both a deep understanding of the details of a manufacturing business that is all about quality and a respect for brands with a long heritage like ours. We look forward to taking the next steps with our partners and carrying our family business into an even brighter future.”
Michael Chu, Co-CEO of L Catterton said: “We look forward to partnering with the exceptional management team and the Birkenstock family, as well as our longtime partner Bernard Arnault in one of the most iconic and well-regarded brands in this industry. We are confident that L Catterton’s unique capabilities and our global platform and network will provide Birkenstock not only with new opportunities, but the resources to support the continued growth in the brand and the business.”
Bernard Arnault said: “Birkenstock was founded nearly 250 years ago and has grown to become one the few iconic brands in the footwear industry. We truly appreciate brands with this long heritage, and accordingly, I am delighted that Financière Agache, my family investment company, will invest in the company alongside L Catterton, with whom we have a longstanding and close partnership. Together we will provide support to the business so it can fully realize its significant growth potential.”
Photo courtesy Birkenstock
