Brait are back in the headlines with another massive deal, Brait Acquisition Of A 90% Interest In New Look. They will pay GBP 780 million for a 90% stake, which they are buying from two private equity groups, the remaining 10% is held by management (great for incentives and aligning interests). At this mornings exchange rate that works out to R 14.55 billion, so not a small acquisition. It ranks as their second biggest investment after Steinhoff and R2.3 billion more than the recent deal Brait to acquire Virgin Active.
I can't say that I have ever heard of New Look, but this one stat I think tells you everything you need to know, "approximately 43% of female adults and teenagers in the UK shopped at New Look at least once in 2014.". The market cap of New Look will be GBP 867 million and add to that GBP 1 billion in debt, which gives you an Enterprise value of GBP 1.9 billion. What do the earnings look like? At the end of 2014 they had EBITDA of GBP 211 million, which has been growing by double digits. They are then paying 9 times EV/EBITDA, which is fair given the high growth projections and the low interest rate environment.
Brait still have some cash left over from their sale of Pepkor to Steinhoff. Not enough though, so they will need some debt to do this transaction.