Shoosmiths has advised Truworths International ('Truworths') on the acquisition of an 88.9% stake in fashion footwear chain Office Retail Group ('Office').
The deal value is R5.5 billion (£256 million) and marks the South African fashion retailing group's entry in to the UK retail market.
The deal completed on 4 December. The business has been acquired from investment funds advised by European private equity group, Silverfleet Capital, and the management of Office. Management have reinvested a portion of their proceeds from the sale to retain an 11.1% shareholding in the business. Truworths has the option to buy the shares owned by management in a three to five year period after the acquisition.
Truworths CEO, Michael Mark, said the acquisition provides Truworths with access to the UK and continental European retail markets and the opportunity to diversify the group's customer base and earnings.
Office is the leading young fashion footwear retailer in the UK and Ireland, trading under the Office brand and specialist brands Poste (men's footwear), Poste Mistress (ladies footwear) and Offspring (sports footwear). Office has 109 stores in the UK and the Republic of Ireland and 47 concessions in high profile retailers Selfridges, Topshop and House of Fraser. The business started its expansion into continental Europe in 2014 and currently has six stores in Germany. Office also operates a successful e-commerce business which now accounts for approximately 20% of sales. In the year to January 2015, Office generated sales of £270.2 million (R [5.8] billion).
Following the acquisition, approximately 35% of the group's revenue will be generated outside of South Africa, and approximately 54% will be generated from cash sales.
The transaction will be funded through R3.6 billion in cash and £100 million of debt funding to refinance existing Office debt and provide working capital facilities. The acquisition will be effected through a Truworths' subsidiary that is resident and managed in the UK.
Shoosmiths was recommended to Truworths by leading South African law firm ENSafrica through global professional business network, the World Services Group (WSG). ENSafrica has been advising Truworths in Southern Africa for many years.
Teams from across Shoosmiths' range of commercial practice groups - including corporate teams in Manchester, Birmingham and Milton Keynes - advised Truworths on the transaction. Corporate senior associate Sarah Thawley and associate Claire Checketts worked on the acquisition and management equity arrangements, respectively.
Truworths CEO Michael Mark said: 'Our partnership with Shoosmiths was key to Truworths successfully navigating the numerous legal and practical complexities relating to the acquisition and the funding thereof. Their versatility, thoroughness and accessibility throughout the process contributed greatly to the timeous conclusion of the transaction. The Shoosmiths team played a most important role in ensuring the work being carried out by the various advisers associated with the acquisition proceeded in a well-co-ordinated and informed manner.'
Shoosmiths corporate partner, Kieran Toal, said: 'It is a pleasure for us to advise Truworths on this globally significant acquisition and we very much appreciate being recommended as a law firm with strong retail expertise through the World Services Group. This has been a heavily partner-led transaction. Given this is Truworths' first European acquisition and Office has such a large footprint, a number of our teams have been involved in working very hard to get this deal over the line. We wish Truworths every success in their investment in to Office.'
This week Shoosmiths won 'UK Law Firm of the Year' at Legal Week's British Legal Awards and the national corporate team has been placed second by deal volume in Experian's UK Deal Review and Advisor League Table. Shoosmiths was also crowned 'Law Firm of the Year' at the M&A Awards 2015.
Shoosmiths' corporate team advises public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.
