Private equity firm L Capital Asia has taken a 40% stake in apparel and compression specialist 2XU, with the value of the stake reported at around US$75 million. In turn, the deal is said to value 2XU at US$166 million, or roughly 2.5 times its US$65 million in annual sales.
L Capital Asia is backed by luxury goods conglomerate LVMH Moët Hennessy; French fashion house Louis Vuitton SA; Groupe Arnault, the private holding company of French businessman Bernard Arnault, CEO of LVMH; and Malaysian infrastructure conglomerate YTL Corp Bhd.
With investments across a range of industry categories, including apparel and sportswear, L Capital Asia ‘focuses on businesses that will benefit from the growing discretionary consumption in emerging Asian markets, across select buckets of lifestyle consumption.’
Founded in 2005 and based in Melbourne, Australia, 2XU’s initial founders are Clyde Davenport, Jamie Hunt and Aidan Clarke. In 2011 the company secured the backing of Lazard Private Equity, which ‘acquired a significant minority interest in 2XU.’ It is understood that the latest investment from L Capital Asia will cut the founding trio’s stake in 2XU to 42%; while Lazard’s stake will shift to 18%.
“The founders have given up their shareholding to accelerate our growth,” Clyde Davenport said.
The funding injection from L Capital Asia will be directed at an Asian expansion and a furthering of 2XU’s international reach.
“We will build a bridge to Asia for 2XU,” said LVMH’s Ravi Thakran. “We have knowledge of brand building and will keep 2XU distinct, as we do with all our brands.”
In recent years, 2XU has built significant momentum with a number of step changes for the business.
In March 2012, 2XU confirmed the acquisition of its US based distributor, Sports Multiplied LLC – following a successful six year relationship with the west-coast based company. Twelve months later, in March 2013, the company announced the appointment of Kevin Roberts as Chief Executive Officer.
2XU has an international array of sponsorship deals with athletes, organisations and teams. Most recently, in the summer of 2013, 2XU was appointed Official Compression Partner of the Ironman Foundation Newton Running Ambassador Triathlon Team.