Investcorp sells Carter's for $450 million

Investcorp, the Bahrain-listed investment bank and Berkshire Partners a Boston-based private equity firm signed an agreement, under which Berkshire will acquire the William Carter Company for $450 million.

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By  Massoud Derhally Published  July 17, 2001

Investcorp, the Bahrain-listed global investment bank will sell the William Carter Company, the largest manufacturer and marketer of children's apparel in the United States, to Berkshire Partners, a Boston-based private equity firm that manages close to $3 billion of equity capital.

Investcorp acquired Carter’s in 1996 for $208 million from Wesray Capital Corporation and is selling it to Berkshire, after holding the company for four and a half years, for $405 million. The transaction, which is expected to close in the third quarter of 2001, will involve the continuing leadership of the company’s senior management. Upon completion of the transaction, investment funds established by Berkshire and management will own all of the company’s equity. Berkshire’s equity investment will total approximately $130 million.

Commenting on the transaction, Investcorp Management Committee Member and General Manager of the Firm’s Bahrain office, Salman Abbasi, said: “We are very pleased with the outcome of our four-and-a-half-year investment in Carter’s. The company has fulfilled the potential we saw when we invested in it, convincingly achieving its strategic objectives and thus providing a very favorable return to our investors. Carter’s is now well-positioned as a leader in a growing market sector and we wish the management every success for the future.”

Since Investcorp acquired it, Carter’s consolidated sales increased from $318.2 million in 1996, to $471.4 million in 2000. Investcorp is famous for high profile acquisitions like Saks, the fashion retailer, Tiffany & Co. and Gucci the Italian couture house. The firm has made its mark by carrying out leveraged buyouts, reviving companies and when they improve either sells them privately or conducts and initial public offering (IPO). Since its inception 19 years ago, Investcorp has concluded over 80 transactions with an aggregate value of $19 billion and has returned to investors an average return of investment of 26% per annum.

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