Carlyle mulls £1bn+ Dr Martens buy as it seeks Golden Goose exit
today Nov 25, 2019
Famous British footwear brand Dr Martens could end up in American hands with news that private equity group Carlyle is considering a bid for the brand that could value it at over £1 billion. The company is currently owned by European buyout specialist Permira.
None of the parties involved have confirmed any talks but sources with knowledge of the matter told Bloomberg that Carlyle is definitely looking at the company, although it's only in the early stages. This means no final decisions have been made, there have been no concrete offers for the company and other potential bidders could emerge.
It's also been reported that Permira is working with Goldman Sachs and Robert W Baird to explore options for the future of the brand. But as well as a possible sale, those options could include an IPO as Permira seeks to exit its investment in the label next year.
There has been talk that Dr Martens could fetch £1.2 billion, which would be a big return after Permira paid £300 million for it five years ago. But the premium price is understandable as Permira has put plenty of support behind expanding its physical shops and its online operation and its results have reflected this.
It remains a fairly unique brand that can trade on its heritage positioning while also being on-trend, and this is paying off with its EBITDA profits rising 70% in its latest year to £85 million. It’s got its eye on the trend pulse and is exploiting the vegan trend well, with its vegan boots now making up 4% of its total sales. Its online revenues have also risen almost 70% and it has opened new stores internationally for a total of 109 physical shops worldwide.
Carlyle itself could be looking for a new challenge to take on via a brand that’s big but has the potential to become even bigger, something it has already done with sneaker brand Golden Goose. It has owned the fast-expanding high-end brand since 2017 and is reportedly looking to sell the company to make the most of the much higher valuation that it currently has. Golden Goose sales were around €100 million a year when Carlyle first invested in it, but in its latest financial year, they were up to around €260 million according to estimates. And importantly, earnings have been rising fast as well.
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