AAC Capital Partners and Polaris acquire BabySam

Investment will transform the chain of independent shops to create the Nordic region’s leading integrated baby equipment retail chain

AAC Capital Partners, one of Europe's leading private equity firms, and Polaris Private Equity, the leading Danish/Swedish mid-market private equity fund, have agreed to acquire a majority stake in BabySam, Denmark’s leading baby equipment retailer. Management will also be making a substantial reinvestment.

The acquisition is subject to regulatory approval and is expected to complete by April 2008. Debt financing will be provided by HSH Nordbank.

Founded in 1976, Babysam is a chain of 31 independent stores with a combined revenue of approximately DKK 500 million (Euro 65 million). BabySam enjoys the largest market share in Denmark and its brand is widely recognised as a retailer with a high quality product range (including baby carriages, pushchairs, nursery, safety and feeding products and clothing).

AAC Capital Partners and Polaris Private Equity plan to transform the chain of independent shops to create the Nordic region’s leading integrated baby equipment retail chain. The plan is to create value by opening new stores, acquisitions and implementing operational improvements such as centralising the sourcing and finance functions supported by an upgraded HR function.

The plans are supported by all store owners who will continue to work with AAC Capital Partners and Polaris Private Equity to grow BabySam both domestically and abroad.

The transaction, a management buyout, was highly complex, involving 12 different legal entities. David Holm-Ovrén coordinated the investment on behalf of AAC Capital Partners, while Jan Johan Kühl coordinated on behalf of Polaris. AAC Capital Partners and Polaris Private Equity will operate on a joint lead basis.

AAC and Polaris Private Equity have assembled an experienced board of directors, which includes Sanna Suvvanto-Harsee most recently CEO of Reckitt Benckiser Scandinavia.

David Holm-Ovrén of AAC Capital Partners Nordic buyout team said: “There is a real opportunity to develop a leading integrated pan-Nordic chain, and our goal is for BabySam to take the lead in consolidating the Nordic market through further acquisitions and establishment of new stores. The market is a compelling one, with baby equipment retailing growing due to increased spending per baby.”

Jan Johan Kühl of Polaris Private Equity said: “This is an exciting deal, not least because the business has a robust earnings profile and a long track record of growing faster than the overall retail market. BabySam is a retailer with a great reputation for high quality products and we will build on its position as having the largest market share in Denmark and being the most professional player in the Nordic countries.”

Uwe Koch, CEO of Babysam A.m.b.A said “We are looking forward to working with AAC and Polaris in establishing the leading integrated baby equipment retailer in the Nordic region. We hope to realise significant synergies when we coordinate functions on a group wide basis.”

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Advisers

AAC Capital Partners & Polaris Private Equity

• Financial - PriceWaterhouseCoopers
• Legal – Bech Bruun
• Commercial – Boston Consulting Group and CoCoCo
• Property – CBRE Cederholm
• Investment Banking - Audon Partners

Sellers

• Investment Banking - PriceWaterhouseCoopers Corporate Finance
• Legal – Plesner