N Brown is preparing for an acquisition by a firm owned by its own non-executive director, signalling significant strategic shifts.
- The company’s decision to delist from AIM follows a dwindled interest in UK small-cap stocks and high listing costs.
- The acquisition sees a substantial premium, valuing N Brown at £187 million compared to its current market capitalisation of £126 million.
- N Brown’s turnover fell by 9.8% to £601 million, and adjusted EBITDA also saw a decrease of 12.5% amid challenging economic conditions.
- Interim executive chair Steve Johnson supports the acquisition, aiming for accelerated growth and enhanced stakeholder value.
N Brown, known for owning popular brands such as JD Williams and Simply Be, is set for a strategic takeover by a new company owned by its non-executive director Joshua Alliance. This move, associated with plans to delist from AIM, comes amid reduced appetite for UK small-cap stocks and the significant costs tied to its listing. Consequently, this strategic pivot aims to enhance long-term growth potential by reducing operational constraints and increasing financial flexibility.
The proposed acquisition price of 40p per share substantially values N Brown at approximately £187 million, marking a notable premium to its existing market capitalisation of £126 million. Expected to complete in early 2025, the acquisition still awaits shareholder approval. The decision reflects a broader strategy to escape the burdens of the public market, which includes limited trading liquidity and markedly low appetite for consumer stocks from UK fund managers.
This acquisition announcement coincides with N Brown’s latest financial reports, where it revealed a decrease in turnover by 9.8% to £601 million and a decline in adjusted EBITDA by 12.5% to £47.6 million by the end of March 2024. These figures highlight the tough economic landscape the company is navigating, making the proposed delisting and acquisition a potentially strategic solution to mitigate such challenges.
Joshua Alliance, who will lead the acquiring firm, has expressed optimism about the potential benefits of operating privately. He emphasized that this transition would better position the business to leverage additional capital, expertise, and resources necessary for pursuing its growth ambitions away from the public market. His statements underscore the strategic intent to refine business operations and focus on long-term sustainability and growth.
Reflecting on these developments, interim executive chair and CEO Steve Johnson confirmed the unanimous support from N Brown’s independent directors for the acquisition. He reiterated the potential for this strategic realignment to serve the company’s longstanding commitment to its underserved customer base while ensuring value for all stakeholders.
N Brown’s impending acquisition marks a pivotal transition aimed at bolstering its growth while addressing current market and economic challenges.
