Istithmar PJSC signed a definitive agreement to acquire Loehmann's Holdings Inc from Arcapita Inc. a leading Atlanta-based private equity firm. The transaction, valued at AED 1.1 billion ($300 million), is subject to closing conditions. Arcapita acquired Loehmann's in October 2004 for a transaction value of approximately AED 653 million ($178 million).
Founded in 1921 and based in New York City, Loehmann’s is a leading U.S. specialty retailer of well-known designer and brand name women's and men's fashion apparel, accessories and shoes at prices that are typically 30 percent to 65 percent below department store prices. Loehmann’s currently operates 60 stores in major metropolitan markets located in 17 states.
Sultan bin Sulayem, Executive Chairman of Istithmar commented, "Istithmar has worked alongside Arcapita and Loehmann's, holding a Board Seat since it made a significant indirect investment in the company in early 2005. We look forward to working closely with Loehmann's management to continue the strong track record of growth."
David Jackson, Chief Investment Officer continued, “Our expanded investment in Loehmann’s reflects our strategy within the retail sector of focusing on unique concepts at the top and bottom ends of the market. Combined with a first-rate management, we have great plans for the future of Loehmann’s.”
Loehmann’s Chief Executive Officer Robert N. Friedman said, “We are pleased that the value of our business model and organization is being recognized and endorsed by major investment houses like Arcapita and Istithmar. We are proud to be a new member of the Istithmar portfolio of companies and look forward to our partnership as we continue to expand and take the business to the next level.”
Charles H. Ogburn, Arcapita’s Global Head of Corporate Investment, said “We are pleased to announce the profitable sale of Loehmann’s after a holding period of less than two years. To date, we have exited from six corporate portfolio companies for total transaction values in excess of $1.1 billion, generating attractive returns for our investors.”
Stockton Croft, Director and Head of U.S. Corporate Investments for Arcapita, said, “We took the company private in 2004 and have worked with Loehmann’s management to execute its growth strategy which comprised opening new stores and establishing a footwear franchise. The successful completion of this sizeable transaction with Istithmar will solidify our position as a leading mid-market private equity player in the United States.”
Peter. J. Solomon acted as financial advisor to Istithmar and Cleary Gottlieb Steen & Hamilton acted as legal advisor on the transaction. Lehman Brothers acted as Arcapita’s exclusive financial advisor and King & Spalding as legal advisor.
About Istithmar:
Istithmar PJSC is an alternative investment house based in the United Arab Emirates focusing on private equity, real estate and other alternative investments. Established in 2003, Istithmar was created with the key mission of earning exceptional returns for its investors while maintaining due regard for risk.
Istithmar, which means investment in Arabic, applies global expertise with local insights to coordinate the appraisal and implementation of various opportunities. Istithmar’s ‘I’ investment philosophy is based around three core principles -- Ideas, Inquiry & Integrity -- sets the foundation for the firm which has a broad portfolio of highly successful companies in markets from North America to Europe to Asia to the Middle East.
Established with an initial investment capital pool of $2 billion, Istithmar has, to date, invested in 35 companies deploying approximately USD 1.6 billion in equity capital. It currently focuses its activities in four industry verticals – Consumer, Financial Services, Industrial and Real Estate. Istithmar will enhance its own existing capital pool of $2 billion through partnerships with world-class corporations and other leading providers of capital, the creation of investment funds and leverage.
About Arcapita
Arcapita is a global investment group with offices in Atlanta, London and Bahrain. Arcapita’s main lines of business include corporate investment (private equity), real estate investment, asset based investment, and venture capital. Arcapita’s corporate investment line of business was founded in 1997 and operates out of Atlanta and London. To date, Arcapita has completed 52 transactions with a total value exceeding $11 billion. More information on Arcapita is available online at www.arcapita.com
