Ethos bags House of Busby for R1,3bn

House of Busby shareholders have overwhelmingly voted in favour of the R1,3bn acquisition of the international brands retailer by Ethos Private Equity Fund V in partnership with management and empowerment private equity firm Sphere.

Shareholders holding 98,2% of the shares approved the private equity consortium's acquisition of Busby for cash at R21 a share, at a shareholders' meeting yesterday.

The House of Busby's share price notched up 10c yesterday to close at R20,70, just shy of the acquisition price. A delisting is expected towards the end of April, depending on the timing of competition authority approvals.

This is the second transaction announced by Ethos in the past few weeks, following shareholder approval of the R1,03bn buyout of Tiger Automotive.

The House of Busby is a wholesaler and retailer of branded and unbranded apparel, handbags, accessories, leather goods and related products. It has operations in SA and Australia. Its brands include Aldo, Nine West, Guess, Mango, Marion and Lindie, ESPRIT, Busby, Delsey, Hepker's, Kipling and Travelite.

Last month The House of Busby said it expected earnings to rise 40%-50% in the six months to December 31.

A year earlier, net profit was R40m. Ethos Partner Danie Jordaan said: “We identified the growth potential of Busby early last year. Coupled with a solid management team with proven experience, particularly in branded retail, product design and sourcing from China, we envisage a winning long-term partnership.”

Busby CEO Keith Brouze said the relationship with Ethos would enable the company to “reach the next level in market presence in both SA and Australia”.

Ethos would give Busby access to a substantial pool of capital which would support growth plans and “their commercial expertise will add considerable value to the business”.

He said:“We have structured this transaction with a specific view to grow the business. Interestingly, this means the gearing is relatively low for a private equity type transaction.”

Source: Business Day

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