Mr Price
Investment Banking
Investec advises Mr Price on its acquisition of the Studio 88 Group in a sector defining deal valued at R4.7bn.
Our role
Investec acted as the financial advisor and transaction sponsor to Mr Price, a JSE listed fashion-value retailer, on the acquisition of 70% of Blue Falcon Trading 188 (Proprietary) Limited, which owns the Studio 88 group of businesses (“Studio 88 Group”), from RMB Ventures and current management in a deal valued at R4.7 billion on an enterprise value basis. The remaining shareholding will be acquired in the four years subsequent to the implementation of the initial acquisition.
The brands offered by the Studio 88 Group are complementary to Mr Price’s existing customer positioning and, combined, would deliver on the group’s strategic positioning across the fashion-value and aspirational value segments. With a diverse store footprint and a portfolio of differentiated store chain formats, the Studio 88 Group has broad appeal to aspirational and trend conscious customers across a wide range of age profiles and affordability levels. Mr Price will benefit from growth opportunities in the menswear segment where it is currently under-represented.
About Mr Price
Mr Price is a South African JSE-listed omni-channel fashion value retailer with a store footprint of c.1,702 stores offering merchandise across the apparel, homeware, sportswear, financial services and telecoms segments.
About Studio 88
The Studio 88 Group is the largest independent retailer of branded leisure, lifestyle and sporting apparel and footwear in South Africa, generating revenue of R5.6 billion for the financial year ended 30 September 2021. It is a founder-led business which has been operating in Southern Africa since 2001. The business owns and operates retail outlets that offer clothing, footwear and accessories, trading through Studio 88, SideStep, Skipper Bar, John Craig and other chains.
The Studio 88 Group is focused on consumers who make aspirational fashion choices. The merchandise range is a mix of international brands, some of which are under exclusive licensing agreements, as well as private label ranges. The business operates through in excess of 700 stores, predominantly based in South Africa, which are positioned in central business districts‚ regional malls and rural high streets, and via its e-commerce platforms. The Studio 88 Group is highly cash generative and operates on a cash-only basis, which contributes to its value positioning.
The management team of the Studio 88 Group has an impressive track record of maintaining strong brand relationships and customer loyalty, delivering consistent earnings growth over the long term.
Disclaimer
The information contained in this communication is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. As product supplier, Investec is not in a position to have regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The sender accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this communication. Investec does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. Investment Bank South Africa, a division of Investec Bank Limited. Reg. No. 1969/004763/06. A member of the Investec group of companies. Investec Bank Limited is regulated by the South African Reserve Bank and is an Authorised Financial Services Provider and Credit Provider.