Sun Capital buys clothing business

The US buyout firm has paid €100 million and assumed pensions liabilities worth €70 million to acquire the branded clothing arm of US conglomerate Sara Lee.

Sun Capital Partners Inc., the Florida-based buyout firm, is acquiring the European branded apparel business of US conglomorate Sara Lee Corp. for an enterprise value of at least €170 million ($199 million).

There is always an unfunded plan in any European business you acquire

Nathaniel Meyohas, vice president, Sun Capital

The deal includes an initial payment of €100 million, as well as further payments of up to €100 million contingent on performance.
Sun Capital will also assume €70 million of pension and other liabilities on the European mainland. The vendor will retain responsibility for the company’s €62 million of pensions liabilities in the UK.
Nathaniel Meyohas, a vice-president in Sun Capital’s London office, told PEO that the firm was unconcerned by the pensions deficit: “Taking on pensions is pretty standard these days. There is always an unfunded plan in any European business you acquire.”
Sara Lee is refocusing its business on its food and drink, household and body-care operations, and is also selling its cosmetics business and US coffee operations.

Meyhohas: unfazed by pensions

The company first announced its plans to sell its European clothing operations in January. At the time, market rumours predicted a price of anywhere up to $1 billion. However, in a statement the company’s chairman and CEO Brenda C. Barnes said they were “pleased with the economics of the deal”.
Sara Lee’s European branded apparel business produces clothing under brandnames including Dim, Playtex, Pretty Polly and Wonderbra. It generated $1.2 billion of sales last year.