Dive Brief:
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L Capital, the investment arm of luxury retail conglomerate LVMH, will merge with American consumer-focused private equity firm Catterton to create a new consumer goods-focused private equity firm dubbed L Catterton, the companies announced. Catterton managing partners J. Michael Chu and Scott A. Danke will become global co-chief executives at L Catterton. L Catterton’s partners will own 60% of the new firm, and LVMH and Groupe Arnault (LVMH founder Bernard Arnault’s holding company) will jointly own the rest.
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The combined entity will become the globe’s largest consumer-focused investment firm with six fund strategies focused on consumer buyout and growth investments and real estate investments across North America, Europe, Asia, and Latin America, according to the companies’ release. L Catterton expects to grow its assets to more than $12 billion after various successor funds are closed. The combined company will have more than 120 investment and operating professionals in 17 offices across five continents.
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L Catteron’s headquarters will be in Greenwich, Connecticut, and London. Financing and structure of the deal were undisclosed.
Dive Insight:
This may be the ultimate retail “if you can’t beat ‘em, join ‘em” move, with two private equity firms creating synergies by combining rather than competing.
LVMH has been an investor in Catterton’s funds, and, while LVMH has ambitions to invest more in brands in North America and Latin America, Catteron has similar ambitions to invest more in Europe and Asia. The two, in an unusual move for private equity firms, will now do so together. L Catterton will enjoy Catterton's buyout expertise and LVMH's reach in the luxury market to invest in brands and companies with what the companies called "high growth opportunities in categories with attractive consumer economics.”
“The globalization of media and technology, combined with increasingly permeable geographic borders, is driving rapid consumer growth on an unprecedented global scale,” Dahnke said in a statement. “Together, Catterton and L Capital will create a global consumer investing franchise with unmatched access to resources in the industry. We expect this combination to further our mission of investing in high growth opportunities in categories with attractive consumer economics.”