Looking for recommendation - Mid-market Buyout funds (Go Private)

searcher profile

October 17, 2023

by a searcher from ESSEC Business School in Torrance, CA, USA

Hell SF community,

I am looking for recommendation of Mid-market buyout funds who specialise in taking Public companies Private.
My search fund thesis was $5mm EBITDA ($20mm to $30mm top line) when I started early this year but given the rout in the stock market - particularly in Fashion & lifestyle space : this presents a unique opportunity to take some of these companies private.

Here are some of them -
EXPRESS: -95.46% | $1.86 B (Sales) | current trades under $32mm enterprise value
FARFETCH: -92% | $2.32 B (Sales) | current trades under $625 mm enterprise value : close to becoming a penny stock Nordstrom: -76% | $15 B in sales | current trades under $2.32 B enterprise value

Other large caps that are being battered:
Asos Fashion: -93%
VF Corporation Corp: -81%

The list is endless - to be honest, I stopped looking beyond the first 50.

A large chunk of these brands may not even survive -so the market is right about them (for example Expresss) but some of these brands are taking the beating because their supply chain is still stuck in 2003 while we are in 2023.

My unique background in Operations & supply chain is a good fit specifically for some of these brands that are caught in a downward spiral because of their supply chain. However I lack deal making skill sets - especially the heavy lifting required to take a company private.

I am looking to partner with a mid-market buyout fund who have done at least 1 or 2 go-private transactions. Funding for these go-private transactions may not be a deal breaker because despite being battered, these brands have sizeable AR and assets that can be leverage for funding the transaction in additional to our equity.

Any leads or recommendation would be super helpful.

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commentor profile
Reply by an investor
from University of Rochester in Savannah, GA, USA
I would agree with the EV/market cap confusion comment (many of these companies have large amounts of debt). Also, their problems are not limited to supply chain, often it is “fashion risk” that brings them down.
commentor profile
Reply by a searcher
from Carnegie Mellon University in San Jose, CA, USA
I believe you are mixing between EV and MarketCap. For example, EXPR MarketCap is hovering under $15M but the EV is close to $1B and balance sheet has >$1B asset (and matching liabilities).
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