Advent stocks its closet with $380m Charlotte Russe deal

Advent International has agreed to buy women’s apparel and accessory retailer Charlotte Russe for $380 million.

The amount is equivalent to $17.50 per share, which represents a premium of 26.9 percent over the company’s closing share price on 21 August of $13.81.

The company’s share price has roughly doubled since November, when private equity firms KarpReilly Capital and HIG Capital offered between $165 million and $175 million, or $9 and $9.50 per share, for Charlotte Russe in an unsolicited bid. Rejected by the company’s board, the KarpReilly/HIG offer represented a 38 percent premium to share price at the time.

Earlier this year, Advent paid $561 million for a 51 percent stake in Fifth Third Bancorp’s financial institutions processing business. The acquisition was made through a joint venture between Advent and Fifth Third, in which the Fifth Third retained a 49 percent stake in the company.

Advent is investing from its €6.6 billion sixth global buyout fund, which closed last year.

It is one of a handful of firms that exemplified the “buy low, sell high” maxim in the past five years. As multiples soared and bidding wars ensued, Advent was one of only 10 firms from the PEI 50 that were net sellers of assets between 1 January 2004 and 15 April 2009, according to exclusive research from PEI Media.