Strewth mate - the bankers are sniffing round my wardrobe!

It was reported yesterday that KKR, the private equity buyout group, has made an unsolicited approach to acquire Pacific Brands, an Australian retailer with some of the world’s most iconic brands in its portfolio. Pacific owns brands such as Diesel, Clarks Shoes, Jockey, Dunlop and Slazenger, amongst many others.

Like in the UK, the Australian retail sector has suffered hard times of late, but unlike the UK – which is still struggling with poor consumer confidence as a result of the ongoing worries over another recession – Australian confidences have been dented more as a result of the strong currency that has significantly helped importers as opposed to home-grown retailers.

Private Equity activity involving Australian targets in 2010 and 2011 was pretty constant in terms of announced deal value, with $5.8bn and $5.7bn (USD), respectively. However, if the Pacific Brands deal were to proceed, given that the company has a current market capitalisation of around $603m and has a global brand base, this could be a healthy start to 2012 for Private Equity in the Oceanic region.
 

Filed under: brands, PE, retail, Australia