Seraphine sells: Maternity brand worn by celebrities including Kate Middleton and Kate Winslet to be taken private in £15.3m deal
The board of Purple Bidco, owned by Mayfair Equity, and directors of Seraphine have agreed to buy out the maternity clothing company in a deal which values the celebrity fashion favourite at £15.3m.
The offer represents a 206 per cent premium of the firm’s share price, with each share being sold for 30p cash in the offer.
The company will now be taken private in a deal which represents a 90 discount to Seraphine’s initial public offering price of 295p per share in the summer of 2021.
Its board also said MEP, which owns 42 per cent of shares, has committed to “accelerate growth and reinforce the company’s balance sheet”. as the smaller company struggled to stay afloat during turbulence of the last two years.
The maternity and nursing wear brand came to prominence after its products were worn by the Princess of Wales, and other high-profile women including Halle Berry, Kate Hudson, Angelina Jolie, Katherine Jenkins and Kate Winslet.
After having opened the doors of its first shop in Kensington in 2002, the company made its debut on the London Stock Exchange last summer, with a market valuation of just over £150m.
Sharon Flood, chair of Seraphine, said the “firm has faced an extraordinary convergence of challenges since listing in 2021” including the cost of living crisis, as millions of Brits cut back on luxuries.
“Whilst the whole retail sector has been affected by these issues, Seraphine, a relatively smaller company new to the London Stock Exchange with a large reliance on e-commerce, has, we believe, been disproportionately challenged.
“Despite the huge efforts of our people and management, who have managed to improve gross product margin, achieve higher basket sizes and expand into several new markets, the business continues to operate in a very uncertain and challenging market. Whilst we are cautiously confident in our ability to restore profitable growth in the future, additional capital now would enable us to make investments to accelerate our growth strategy.
“Seeking this capital on-market would likely be highly dilutive, and the restoration of value would take time.
“The Seraphine board, therefore, believes that this transaction would remove the substantial costs associated with being listed and afford management the time and space to give their full attention to a return to profitable growth.
She added that the company also welcomes “further capital which has been committed by Mayfair, to accelerate growth and reinforce the Company’s balance sheet”.
“The Seraphine Independent Directors believe the offer from Mayfair, which follows a period of intensive negotiation and which represents a premium of approximately 200 per cent. to the current share price is a fair and reasonable offer that we recommend to our shareholders.”
Bertie Aykroyd, partner of MEP said: “As a major shareholder in the Company, Mayfair remains supportive of management and their strategy. However, Mayfair believes that the Company’s share price is negatively impacting Seraphine’s ability to deliver on its strategy and attract and retain talent. We believe that it would be beneficial for Seraphine, its employees, and its other stakeholders to continue its growth and development as a private company. “
“This would allow Seraphine to operate without the material level of costs of maintaining a public listing, supporting the Company during this period of macro-instability. As part of this transaction, we are also providing additional capital that will strengthen Seraphine’s balance sheet and support our intention to safeguard the business.
“Anticipating that current pressures on the Company and market are to persist for the near-term, our objective is also to provide liquidity to certain shareholders to realise their investment for cash at a significant premium to the current market value.”