Alliance family to take control of N Brown with £191m recommended cash offer
An acquisition deal has been announced for online retailer, N Brown Group, which values the Manchester business at £191m.
The offer is from Falcon 24 Topco Limited, or bidco, and the independent directors of N Brown said they have reached agreement on the terms of the recommended cash acquisition, which the bidco says will lead to investment in an acquisition strategy for the group.
The bidco is controlled by Joshua Alliance, who joined his father, Lord Alliance, on the group’s board as a non-executive director on December 23, 2020 when N Brown pivoted to the AIM market.
He will acquire the entire issued, and to be issued share capital of N Brown, other than the shares already owned or controlled by Joshua Alliance.
Joshua Alliance
It is intended that the acquisition will be implemented by means of a Court-sanctioned scheme of arrangement.
As at the close of business on the Latest Practicable Date, Joshua Alliance owned or controlled 30,943,800 N Brown Shares, representing approximately 6.6% of N Brown’s issued share capital.
In addition, the other members of the Alliance Family Concert Party were, in aggregate, interested in a further 249,915,491 N Brown Shares, representing approximately 53.4% of N Brown’s issued share capital.
The cash offer represents a premium of approximately 111% to the volume-weighted average closing price of 19p per N Brown Share for the 12-month period ended at the close of business on the Latest Practicable Date.
It offers a premium of 63.8% to the volume-weighted average closing price of 24.4p per N Brown Share for the 90-day period and 48.1% to the closing price of 27.0p per N Brown Share as at close of business.
As an alternative to the cash offer, eligible N Brown Shareholders may elect to receive one unlisted ordinary share in the capital of bidco for each N Brown share.
The bidco says it believes that, in light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefiting from being listed on the AIM market, while having to bear significant costs associated with its listing.
It also believes that the acquisition presents an opportunity to acquire a portfolio of well established fashion brands, supported by an innovative financial services platform that is currently under development, with a long history and heritage in the UK clothing and footwear market.
The bidco says it has confidence in N Brown’s current executive team and its leadership. It plans to support the existing executive team’s strategy and intends to work with N Brown’s current executive team to develop, enhance and implement that strategy following completion of the acquisition.
It notes that Steve Johnson, interim chair and CEO, and Dominic Appleton (CFO), being each of the N Brown independent directors who hold N Brown shares, have agreed to elect for the share alternative in respect of all of their current holdings of N Brown shares.
Bidco believes that this demonstrates the confidence that the current executive team has in the future prospects of the N Brown Group.
The acquisition is expected to become effective in the first quarter of 2025.
N Brown’s brands include those of Jacomo, JD Williams and Simply Be.
Joshua Alliance said: “My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history.
“This transaction will support N Brown in accelerating its long term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer term potential of the business. In the business’s current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets.”
He added: “I am excited about the opportunities created by this portfolio of well-established fashion brands, supported by an innovative financial services platform and its talented executive team and employees.”
Steve Johnson said: “N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business.
“We continue to deliver on our strategy for growth, enabled by a sustainable and efficient operating model, and supporting our people and talent.
“Today’s announcement from bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown independent directors are, therefore, unanimously intending to recommend it to our shareholders.”
Addleshaw Goddard is advising N Brown on the takeover. Its team is led by corporate partner and the head of AG’s Manchester office, Roger Hart, and includes Rabia Ahmad, Paul Keohane, Jonathan Fletcher-Rogers, Eleanor Chatterton, Martin O’Shea, Tanim Rahman, Melissa Chaplow and Joel Power.
