L Catterton has sold its majority stake at a steep discount to the DTC era’s peak valuation. Common stockholders get nothing. The Everlane board signed on Saturday.
Shein, the Chinese-founded ultra-fast-fashion giant, is acquiring Everlane, the San Francisco-based direct-to-consumer apparel brand, from majority owner L Catterton, according to reports in Bloomberg.
The transaction values Everlane at about $100m, far below the valuations the DTC brand commanded at the peak of the e-commerce cycle. Everlane’s board signed off on the deal on Saturday, per Puck.
The detail in the deal’s structure is the part worth reading carefully. Holders of common stock will not receive a payout, on Puck’s reading of a note sent to shareholders on Sunday morning.
The transaction is, in plain financial terms, a debt-driven exit by L Catterton, the private-equity firm whose majority stake came with about $90m in liabilities. Puck had reported in March that L Catterton and Everlane chief executive Alfred Chang had been searching for a new investor to address that debt load. They found a buyer in Shein.
