Navis sees 10x return on Trimco exit

"At some point you have to ask whether you have the chance to monetize the business in a way that is fair and equitable," says Rodney Muse, Navis' co-managing director. "We harvested all the low-hanging fruit and put in place an expansion initiative at a time that was challenging for all apparel and retail in Asia."

Navis received a couple of unsolicited approaches from a mixture of strategic and financial investors and entered into preliminary discussions. This pricked the ears of Partners Group and the parties moved quickly towards a transaction. Bruno Seghin, a partner at Navis, was responsible for executing the deal.

For Partners Group, it represents one of relatively few opportunities for a small-cap control buyout in Asia, as well as giving momentum to the firm's strategy of focusing on direct investments. The existing management team will remain, having re-invested a significant portion of their sales proceeds into the company.

For Navis, it is a first-ever 10x exit multiple. The private equity firm has generated approximately $111.4 million from Trimco over a seven-year period, through a combination of capital gains, dividends and repayment of capital.

As part of the transaction, Navis also handed Partners Group the ready-made acquisition of a UK-headquartered label manufacturer with operations in Eastern Europe that would nearly double Trimco's consolidated revenues. "We identified, negotiated and structured the UK acquisition and even came up with an integration plan," Muse says. "When Partners Group purchased the company, they also purchased the option to buy the UK asset."

It caps a wave of acquisitions that took place during Navis' tenure, which to a certain extent reflect the manufacturing sector's spread from China and into south and Southeast Asia in the past decade. Trimco's initial success was built on supplying labels, tags and trimming products to global apparel firms that sourced from southern China.

Navis expanded the company's footprint in China and also took it into Thailand, Singapore, Malaysia and India.

"Manufacturing is fluid and you have to find ways to diversify and prepare yourself for that. All of these areas are going to be important if someone wants to be a strong player in the labels industry," says Muse. "Wage inflation is a big issue in China and it's not the low-cost manufacturing center it was 10 years ago."

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• Topics
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