It is a high-priced deal for high-priced jeans.
True Religion Apparel, the designer denim company, announced Friday that it had agreed to be acquired by the private equity firm TowerBrook Capital Partners for about $835 million.
A deal for True Religion has been expected since October, when the company announced that it was evaluating a possible sale of the company. TowerBrook will pay $32 a share in cash, representing a roughly 9 percent premium to where the shares closed on Thursday.
The purchase underscores the rise of premium-priced jeans as a high-fashion staple and status symbol. Over the past decade, a variety of brands, including Paper Denim & Cloth, Seven for All Mankind and Citizens of Humanity, have fueled the frenzy for expensive denim, hawking their wares for upward of $300.
True Religion, which, like many of its competitors is based in Southern California, was among the fastest growing of these brands, fueling the demand for the perfect pair of frayed, ripped, or faded jeans. It justifies its premium prices by using high-quality denim and having workers hand finish the pants with unique stitching or patterns.
The company was started in 2002 by Jeffrey Lubell, who as a teenager growing up in New York would bleach bell-bottoms and embellish his favorite pairs of jeans with leather and denim patches, according to its Web site. He says of the company’s name: “There’s only one real religion and that’s people. And all the people in the world wear jeans.â€
True Religion started a retail business in 2005, and now operates 124 stores in the United States and 31 locations internationally, as of March 31. In recent years, the company’s growth has slowed as cash-strapped consumers have shied away from its pricey products.
TowerBrook, the private equity firm that is acquiring True Religion, has experience owning upscale brands. The company’s portfolio once included the luxury shoe maker Jimmy Choo, which it sold to German fashion company Labelux.
TowerBrook, which was spun out from the investment firm Soros Fund Management in 2005, also has investments in Rave Holdings, the movie theater chain, and the St. Louis Blues hockey franchise.
Deutsche Bank, Jefferies Group and UBS served as financial advisers to TowerBrook, while Wachtell, Lipton, Rosen & Katz acted as legal counsel. Guggenheim Securities advised True Religion, and Greenberg Traurig provided legal advice.
