Aug 16, 2010
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Advent to sell Germany's Takko Fashion

Aug 16, 2010

FRANKFURT/LONDON, Aug 16 (Reuters) - U.S. private equity firm Advent International plans to sell or spin off Germany's Takko Fashion by early 2011, a financial source told Reuters on Monday.

Takko Fashion

Advent has solicited eight investment banks for proposals to advise it on its options for Takko, said the person, who asked not to be named. "An initial public offering is not the main objective", the person said.

The divestment process will start in September, and Advent aims to finish it in early 2011, the source added. Takko and Advent both declined to comment.

An increasing number of price-conscious Germans have been turning to discount clothing stores, helping boost sales at Takko, one of Germany's largest and fastest-growing clothing chains, to 900 million euros ($1.2 billion) this year through April.

That's up 28 percent since Advent bought the retailer for 770 million euros from rival private equity company Permira [PERM.UL] three years ago.

Dresdner Kleinwort (CBKG.DE) had advised Advent when it bought Takko and Goldman Sachs (GS.N) had advised Permira.

Takko, based in Telgte in northern Germany, was expected to generate at least 125 million euros in earnings before interest, tax, depreciation and amortisation (EBITDA) last year, the Financial Times reported on Sunday.

Bankers said discount retailers were typically valued at 10 times EBITDA, putting Takko's value at about 1.25 billion euros, the paper said.

(Reporting by Arno Schuetze, Alexander Huebner, Ilaina Jonas and Megan Davies; Editing by David Holmes) ($1=.7804 Euro)

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