Leonard Green & Partners, a private investment firm, has agreed to buy majority stakes in the Dallas based Container Store.
The terms of the deal are not disclosed yet, but it’s expected that both will come out with the details soon.
Los Angeles-based Leonard Green holds investments in more than 40 other companies, including a majority stake in David’s Bridal and Petco Animal Supplies.
Leonard Green & Partners is perhaps attracted by the Container Store’s hefty sales expectations in the present fiscal year, which might possibly reach approximately $600 million, a figure that has steadily grown at 15-20 percent per year on average. The company has 39 stores across the country.
Jon Sokoloff, Managing Partner, Leonard Green & Partners, L.P said:
The Container Store is among the finest retailers in America with a unique and powerful culture and we’re proud to work with them, in what we know will be a long runway for growth, opportunity and success
Experts are emulating that the deal was unlikely to lead to higher prices for consumers or to declines in customer service. The Container Store, which has already been expanding, can open more stores to spur further growth and revenue.
To make the deal more transparent and viable to its shareholders, both companies have agreed to constitute six-member board of directors, in which three Leonard Green executives, along with three senior executives of the Container Store will discuss on the best possible negotiations. Investment firm Leonard Green has already shown its interest to acquire Container Store’s current management.
Leonard Green is hopeful that negotiations will lead to some positive output and will be acceptable to both sides. Sokoloff said:
We don’t look at this like we’re buying and they are selling. We see it as The Container Store bringing in a financial partner that will assist them in continuing to run their business in the principled and trailblazing way they have over the last 29 years
Market analysts assert that the ongoing deal is a wise purchase for Leonard Green because of the company’s productivity, strong vendor relations and popularity with proprietors.
