LONDON, UK: Mayfair Equity Partners LLP (MEP), through a wholly-owned indirect subsidiary, Purple Bidco Limited, has offered to acquire entire share capital of Seraphine Group (excluding approximately 42.71 per cent of the voting rights in Seraphine, currently held by Mayfair).
The offer of 30 pence/share values the entire issued and to be issued share capital of Seraphine (including 21.742 million Seraphine Shares, representing approximately 42.71 per cent of the voting rights in Seraphine, currently held by Mayfair Equity Partners) at approximately £15.3 million.
Seraphine is an international digitally-led maternity and nursing wear brand with a diverse range of innovative maternity and nursing products serving a global market.
Seraphine was founded in 2002 with the vision of creating desirable clothes which women would want to wear even if they were not pregnant, and this ethos remains true to this day. The Seraphine Group has over 19 years’ experience designing and developing maternity and nursing wear for women from first trimester to post-partum and nursing products.
The Seraphine Group has achieved global brand recognition through its rapidly growing digital platform, which in the financial year ended 3 April 2022, contributed to approximately 84 per cent. of revenue. The Seraphine Group currently exports products to customers in over 120 countries globally, with the Seraphine Group’s largest markets being Western Europe, North America and the UK.
Sharon Flood, Chair of Seraphine said: “Seraphine has faced an extraordinary convergence of challenges since listing in 2021 including the global supply chain crisis, the cost of living crisis and substantial inflation in online marketing costs.
“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. The Seraphine Board also welcomes the further capital which has been committed by Mayfair, to accelerate growth and reinforce the Company’s balance sheet, as well as Mayfair’s stated support of the management team and employees.
“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 Mayfair Equity Partners 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.”