Asos’ £265m Acquisition of Topshop, Topman, Miss Selfridge

By Shivaum Bapu, Daniel Winsor, Mohammed Safayat, Nicole Phung and Pristie Sharma (UCL), Obielumani Amudo, Mayi Hughes, Devin Vasquez, and Nyasia Jordan (Harvard)

 

Overview of the deal


Acquirer: Asos

Target: Topshop, Topman, Miss Selfridge and HIIT brands

Implied Equity Value: N/A

Total Transaction Size: £265 million

Closed date: 4th February 2021

Target advisor: N/A


Online fashion retailer Asos has acquired Topshop and its sister brands Topman, Miss Selfridge and HIIT from failed retailer Arcadia. 300 of Arcadia’s 13,000 employees will be transferred to Asos, leaving numerous ex-employees and empty stores. Asos plans to transform the newly acquired brands and merge the digital online stores into its own site. Asos has also acquired the intellectual property assets from Arcadia Group’s joint administrators for £265 million. They hope the acquisition will quicken their multi-brand platform strategy, as well as driving online growth more generally. Asos sees the acquisition as a significant move towards becoming the leading fashion site for young people worldwide. More widely, this deal continues the trend of online firms acquiring high street retailers for cheap and emphasises the dynamic consolidation occurring within the sector.


Company Details: (Acquirer - Asos)


Asos plc is a British online fashion and cosmetic retailer. The company’s mission is to be the world’s number one fashion destination for fashion-loving 20-somethings.The website sells over 850 brands as well as its own range of clothing and accessories, and ships to all 196 countries from fulfilment centres in the UK, US and Europe.


Founded in 2000, headquartered in London, UK

Co-Founders: Nick Robertson, Andrew Regan, Quentin Griffiths, Deborah Thorpe

CEO: Nick Beighton (Since 2015)

Number of employees: 3,824 (As of 01/02/21)

Market Cap: £5.67bn (As of 31/12/2020)

EV: £5.6B

LTM Revenue: £3.26B

LTM EBITDA: £278m

LTM EV/Revenue: 1.72x

LTM EV/EBITDA: 20.1x


Company Details: (Target - Topshop, Topman, Miss Selfridge, HIIT)


Topshop, Miss Selfridge, Topman, and HIIT are all leading brands from Sir Philip Green’s Arcadia empire. Topshop and Topman are UK-based multinational fashion retailers. Miss Selfridge is a nationwide UK high street store chain and the HIIT Company is focused on creating functional training apparel within the fashion industry.


Founded in 1964, 1978, 1966

CEO: Paul Price, Paul Price, Nick Beighton

Number of employees: 10,000+ (Topshop and Topman), 1,188

Market Cap: N/A

EV: N/A

LTM Revenue: N/A

LTM EBITDA: N/A

LTM EV/Revenue: N/A

LTM EV/EBITDA: N/A


Projections and Assumptions

Short-term consequences


With Boohoo’s acquisition of Debenhams happening simultaneously, the British highstreet has been left with a gaping wound. Topshop, for one, was Arcadia’s prized jewel. Being embraced by Asos, a fashion-for-all affordable platform, means public perception towards Topshop’s brand - its ethos and reputation may waver.