By Asian Venture Capital Journal
Affinity Equity Partners has sold Hong Kong-headquartered garment label manufacturer Trimco Group to Brookfield Asset Management, for an enterprise value of USD 850m.
The private equity firm has generated a 2.2x multiple and a 19% gross IRR on the investment, according to a source close to the situation. It acquired the business from Partners Group in 2018, committing just under USD 200m in equity to a deal worth USD 520m. There was one dividend recap during the holding period.
Brookfield has become Trimco's fourth consecutive private equity owner in 17 years. Navis Capital Partners bought the company in 2005 for about USD 11m and secured a 10x return on selling to Partners Group in 2012. Partners Group reported a 3.4x return on exiting to Affnity.
Mergermarket, AVCJ’s sister title, reported in March that Affinity had initiated a sale process, targeting an EBITDA multiple of 10x-15x. It added that Trimco delivered USD 67m in EBITDA and USD 200m in revenue in 2021. The process was then put on hold in May amid market uncertainty arising from pandemic-related lockdowns in China, Mergermarket reported.
Founded in 1978 by Miranda Kong, Trimco supplies brand identity products – such as garment labels, hangtags, badges, and buttons – to international fashion and sports brands. Other solutions cover product packaging, in-store displays, and radio frequency identification (RFID) tagging that allows products to be tracked throughout the supply chain.
Trimco serves 800 brands and 8,600 manufacturers, producing 4.7bn units each year, according to its website. The company employs around 1,700 people globally and operates 14 production facilities in 11 countries across Asia and Europe, including operations in Greater China, Vietnam, Thailand, Bangladesh, India, and Pakistan.
Brookfield observed in a statement that Trimco’s main product, a care and content label, contains essential compliance information and that environment, social and governance (ESG) requirements are one of the main drivers of end-user demand.
“We have invested in Trimco because it’s an attractive global business with stable end-market growth, sticky customer relationships and a strong management team. We see opportunities to assist Trimco to expand further in the US market by leveraging Brookfield’s large retail footprint,” added Alex Yang, a managing director at the firm.