CVC Capital Partners is exploring options, including a conventional IPO or a potential trade sale, for street-fashion brand – A Bathing Ape (also known as BAPE), said three sources familiar with the situation.
The global private equity firm, which has EUR 161bn in assets under management, has started preliminary talks with its advisor on a possible exit from the iconic Japanese fashion label, the sources said.
While current talks are focused on CVC's possible exit plan, BAPE’s other co-owner, Sham Kar Wai, founder of delisted Hong Kong-based I.T. Limited, may join in the event of a sale, said the first and second source.
The deliberations remain at an early stage and no final decision has been made, they said.
The deal structure is still unclear as the transaction is unlikely to arrive at the market anytime soon, according to the first source. CVC would like to market the asset with a USD 2bn enterprise value, the same source said.
For both options, the seller would like to keep a minority stake post-transaction, they said. Strategic investors such as American or European apparel conglomerates would be the ideal buyer, they said.
BAPE, which has created strong brand recognition in the global streetwear market, reported around USD 300m in revenue and USD 90m EBITDA for the financial year 2023 ended February, the first source said.
CVC obtained a 50% stake in BAPE after it got involved in Sham‘s USD 460m privatization of I.T. Limited in 2021.
BAPE has 16 stores in Japan and 24 stores spanning across the US, the UK, France, mainland China, Hong Kong, Taiwan, South Korea, Malaysia, Indonesia and Dubai, per its website.
Japanese rapper and fashion designer Tomoaki Nagao (NIGO) founded BAPE in 1993 in Ura-Harajuku, Japan.
The brand, with a logo of an ape face, was inspired by the movie "Planet of the Apes". It has established several sub-brands and offers menswear, womenswear, kidswear, shoes and accessories.
CVC and BAPE did not respond to requests for comment.
According to Mergermarket’s Likely-to-Exit (LTE) algorithm, A Bathing Ape has a score of 31 out of 100. This news service's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a de-SPAC transaction.