FountainVest-backed consortium makes tender offer for Amer

The other consortium members are Chip Wilson, a Canadian businessman who has founded retail apparel companies including Lululemon Athletica, and Tencent Holdings. The latter is an LP in FountainVest's fund and will participate in the deal as a co-investor.

The price of EUR40.00 per share is unchanged from the preliminary offer submitted in September. It represents a 39% premium to the September 10 closing price. The stock gained 9% on December 7 following the announcement of the tender, closing at EUR38.37. Shareholders owning 12.2% have indicated they will accept the offer or view it positively.

Anta will take a 57.95% stake in Amer, with FountainVest, Wilson, and the Tencent co-investment vehicle holding 15.77%, 20.65%, and 5.63%, respectively. The transaction comprises EUR2.66 billion in equity - FountainVest is putting in EUR420 million with a further EUR150 million from Tencent - and EUR3 billion in debt. The debt portion includes the repayment of EUR950 million in existing facilities, according to an Anta filing.

FountainVest's downside protection includes the right to effect of trade sale if Amer doesn't go public within five years at a pre-IPO valuation that gives the private equity firm at least a 2x return. In that scenario, Anta would have first right of refusal to acquire Amer outright.

The investors have promised significant capital and other resources to support product development and recruitment globally. This includes accelerating ongoing strategic initiatives, such as expansion in the Chinese market through access to Anta's distribution, R&D, and sourcing capabilities. They would retain the services of Amer's incumbent CEO and senior management.

Amer was founded as a tobacco company in 1950 and transitioned through several business models until the 1970s when it began manufacturing sporting goods. Its current portfolio includes a range of equipment, footwear, and apparel that is marketed in all major global markets. China accounts for 24% of production value and has been identified as an important growth area.

Net sales improved marginally during 2017 to about EUR2.7 billion ($3.1 billion), while profit declined 3% to EUR215 million. Sales in China grew by 15% to EUR120 million. The company noted that China growth was curtailed during the year by a major distribution model change aimed at optimizing a long-term growth plan targeting an annual sales rate of EUR200 million.

Founded in 1994 and listed in 2007, Anta had nearly 11,000 stores – almost all of which are in mainland China – and 19,000 employees at the end of 2017. Revenue for the year came to RMB16.7 billion ($2.4 billion). The company owns the Greater China rights to Fila and is the NBA's licensee in mainland China, in addition to selling products under a variety of other brands.

Shizhong Ding, chairman and CEO of Anta, said in a statement of the proposed Amer acquisition: "We are excited to bring these premium international brands and products to Chinese consumers, who increasingly seek high-end products with outstanding qualities and heritage in various niche and specialized sports segments."

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• Topics
• Greater China
• Europe
• Consumer
• Buyouts
• China
• Fountainvest Partners
• Tencent