British retailer Next has announced that it will acquire Warburg Pincus’ entire 34 percent interest in the Reiss Group for a total consideration of 128 million pounds.
The transaction, which is expected to be complete by mid-October 2023, will see Next’s holding in the Reiss business increased from 51 percent to 72 percent.
Meanwhile, the Reiss family’s holding will also rise to 22 percent, while the company’s management team will maintain a 6 percent equity stake.
Through the deal, it was also agreed that Reiss’ results will be consolidated into the Next accounts, with the latter noting that the transaction will not materially impact the group’s underlying profit or EPS in the current year.
Next did add that there would be a non-recurring, exceptional gain in the Next Group reflecting the increased value of its investment in Reiss.
The announcement comes as Reiss continued to report strong growth for the year to January 28, 2023, when it achieved total sales amounting to 324.6 million pounds, an increase of 26.4 percent.
Profit before tax also rose to 51.6 million pounds, representing a 50.5 percent increase.
The company is currently being led by CEO Christos Angelides, who was appointed to the position in 2017 after serving in a series of roles at Next for 28 years.
Reiss’ own board of directors will also remain in place, as will the management of its creative independence.
In a release, Simon Wolfson, Next’s CEO, added that Reiss had “performed exceptionally well” since the group’s first investment in March 2021.
He continued: “This success has been driven by the strength of its brand, first class management and the benefits of Total Platform; we look forward to continuing to develop the business with Christos and the Reiss team.”