Fashion holding company N Brown to be acquired by Alliance family for $371m
UK clothing and digital retailer N Brown Group is being acquired by Falcon 24 Topco Ltd (Bidco), a newly formed company owned by Joshua Alliance, in a cash deal valued at £191m ($371.1m).
Transaction Snapshot
Deal value: £191m ($371.1m)
Deal multiples: N/A
Deal type: Acquisition
Investors: Falcon 24 Topco Ltd (Bidco), owned by Joshua Alliance and the Alliance family
Bidco aims to support N Brown's long-term growth by providing additional capital, expertise, and resources as needed. N Brown’s independent directors believe the cash offer gives shareholders an immediate return at a significant premium over recent trading prices.
As part of the deal, Bidco will acquire all N Brown shares not already owned by Alliance or his associates. Shareholders, excluding Alliance, will receive 40p per share in cash. Joshua Alliance currently owns 6.6% of N Brown’s shares, while his family holds an additional 53.4%.
The acquisition will proceed through a court-approved scheme of arrangement under the Companies Act. Bidco contends that N Brown isn't benefiting from its listing on the Alternative Investment Market (AIM) due to low trading liquidity, limited interest from UK fund managers in small-cap consumer stocks, and high listing costs.
The Alliance family sees the acquisition as an opportunity to own a portfolio of well-established fashion brands supported by an innovative financial services platform under development. Bidco believes N Brown can better achieve its growth potential as a private company, considering market dynamics and competition.
"Bidco has confidence in N Brown’s current executive team and its leadership," the company stated. "We plan to support their existing strategy and work together to develop and implement it after the acquisition."
N Brown, parent to brands like JD Williams, Simply Be, and Jacamo, reported a 6.7% decline in its half-year 2024 revenues, dropping to £277.2m ($538.9m) from £297m ($577.1m) the previous year. This follows a 9.8% decrease in full-year 2024 revenues, down to £600.9m ($1,166.7m).
Despite challenging financial results, CEO Steve Johnson said the group met its strategic and financial objectives. "We have adhered to our transformation plans despite the macro-economic backdrop, built resilience through a strong balance sheet, and achieved adjusted EBITDA above market expectations," he stated.
In January, N Brown highlighted customer experience and strategic business positioning as key priorities for future growth. The retailer has invested in initiatives to strengthen its brand portfolio, including launching new websites for its core brands, a new campaign for its Simply Be Autumn/Winter 2024 collection, and appointing a creative agency to boost brand visibility.
