LONDON - The British private equity firm Electra Partners said on Monday that one of its funds would take a majority stake in the British shoemaker Hotter Shoes.
The fund Electra Private Equity will purchase the stake from Gresham, another British private equity firm that focuses on investing in management buyouts.
The deal includes an equity investment of about 85 million pounds, or about $140 million, and the assumption of debt. The total value of the deal is about £200 million, according to a person familiar with the matter.
“We have been tracking Hotter Shoes for several years and it epitomizes what we look for in a buyout investment - a really strong U.K. headquartered business with not only a U.K. growth story but also proven international potential,†said Alex Fortescue, chief investment partner at Electra Partners.
Stewart Houlgrave, the founder of Hotter Shoes, is expected to retain a significant stake in the company and will stay involved in the business. The Hotter Shoes management team will continue to be led by Peter Taylor, its chief executive.
“Electra Partners’ support will be key in enabling the business to expand into new markets and grow its customer base, while at the same time continuing to meet the needs of its existing customers,†Mr. Houlgrave said.
Founded in 1959 as a slipper maker, Hotter Shoes sells more than two million pairs of shoes a year, focusing on stylish but comfortable footwear. Based in Lancashire in northwest England, Hotter Shoes operates 54 stand-alone stores and sells its shoes through more than 200 retailers.
Gresham first invested in Hotter Shoes in 2007 through a management buyout. Since then, the shoemaker has expanded its international reach, including expanding its presence in the United States.
The Lloyds Banking Group and HSBC provided debt facilities for the transaction. Hotter Shoes’ management was advised by Rothschild and Ernst & Young.
