Doc Martens gets £300m buyout offer from Permira
Punk-boot brand Dr Martens is in exclusive talks with private equity group Permira about a £300m sale of the business, two sources close to the deal have said
Negotiations are advanced with a sale potentially being announced by the end of this month, the sources said.
R Griggs, the British family which own the brand, have been looking for some time for an exit from the business after 50 years of ownership. The British shoe-brand, which was first explored a failed sale 15 months ago in a process which Permira did not take part in, the sources said.
Permira is said to have had a close-eye on the company since the previous sale was abandoned after a mis-match between price expectations.
Permira willl be required to pay a separate royalty fee to the brand inventors’ families, Dr Klaus Maertens and Dr Herbert Funck, after a licence deal was renegotiated last year. Under the licence terms the buyer will have to pay a set 2.5pc of sales up to £200m a year and a further 2pc for sales above that.
David Suddens, Dr Martens’ CEO, is thought to be keen to retain a management role, although decisions are still being finalised.
The lucrative Asian market is seen as one growth driver for the business and needs an investment injection, one of the sources said. Sales in the US account for just under half of the company’s revenues, according to the most recent figures.
The shoe’s legendary rubber air-cushioned sole was first invented to protect a ski-related foot injury sustained in 1945 by Munich-based Dr Maertens. The company initially used salvaged rubber from old World War II airfields in Germany. Bill Griggs, a shoemaker from Northampton, bought the rights to the brand from the German duo. After anglicizing the name to Martens, the first eight eyelet boot came into UK production in 1960.
The shoe was instantly adopted by British youth and sales boomed in the 1970s after footwear was adopted by the punk movement, most notably the Sex Pistols.
After a few years of struggling sales in the early 2000s the tough-boot has made a come-back, helped by celebrities known for enjoying controversy such as Rihanna and Miley Cyrus.
The shoe brand reported full year revenues of £110m two years ago and pre-tax profits of £15.3m.