Affinity hires Barclays for Trimco sale; initial bids due 15 March – sources

Breaking News 7 March

Affinity hires Barclays for Trimco sale; initial bids due 15 March – sources

Affinity Equity Partners has hired Barclays as financial advisor to assist with the exit sale of its Hong Kong-based apparel-labeling producer Trimco Group, according to four sources familiar with the situation.

The Hong Kong-based private equity firm will collect first-round bids on 15 March, the first three sources said.

Partners Group, which announced the sale of a majority stake in Trimco to Affinity in 2018, still holds a minority stake in Trimco, two of the sources said. However, the Swiss PE firm has yet to decide on a potential exit of the company, the second source said.

Trimco has seen a strong rebound in 2021, with a 30% and 35% YoY growth in revenue and EBITDA, respectively, the first source said, noting that it is targeting to reach USD 350m in revenue in the fiscal year of 2026. It is actively planning expansion to grasp white-space opportunities in markets like the US and mainland China, with a focus on gaining high growth apparel maker clients, especially in the athleisure segment, the same source mentioned.

Affinity is expecting to fetch an EV/EBITDA multiple of 10x-15x valuation via the sale, the fourth source indicated. The target had USD 67m EBITDA for 2021 and USD 200m in revenue for 2021, the first source mentioned.

Affinity was mulling an exit of Trimco at a valuation of around USD 1bn after it received interests from potential bidders, referring to a news report in January 2022. In 2018, Partners Group sold a majority stake in Trimco to Affinity for a total consideration of USD 520m, generating a 3.4x return on its original investment, as announced.

The financial sponsors which once placed bids for Hong Kong-based peer SML Group two years ago could still be interested in bidding for Trimco, the first source said.

SML halted a sale process advised by Citi in 2020, while Bain Capital, Boyu Capital and MBK Partners showed interest in the deal. Other bidders for SML in the 2020 process also include Affinity Equity Partners, FountainVest Partners, Cornell Capital and Platinum Equity, according to an April 2020 Mergermarket report.

SML was later reportedly seeking to raise USD 200m via a potential initial public offering (IPO), as reported by a newswire in July 2021.

Founded in 1978, Trimco is engaged in the full range of garment labels, tags and trimming products to blue-chip apparel brands and retailers worldwide, with operations through its CLOTEX, LABELON and A-TEX units, its website reads.

The company provides innovative product designs and production techniques, manages and advises on care label regulations for international markets, and operates world class logistics centers, citing its website.

It currently has more than 1,700 employees in 21 countries, serving more than 800 brands and 8,600 manufacturers around the world, as per the website.

Partners Group and Barclays declined to comment, while Affinity and Trimco did not respond to requests for comment by the time of publication.

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