Sage Group: Structuring Mid-Range Mergers and Acquisitions
Los Angeles-based Sage Group LLC is a 2-year-old merchant bank with a focus on mergers and acquisitions of mid-range companies valued between $50 million and $500 million such as Earl Jeans, a client Sage advised in its recent sale to Nautica Enterprises.
According to Brien Rowe, one of the managing directors of Sage, when Earl Jeans felt the need to expand, Sage researched and assembled a list of potential investors and presented them to the company. Sage also followed the deal through, negotiating the deal and structuring the financial elements of the agreement.
Earl Jeans represents a key trend in the apparel industry, according to Rowe, of apparel companies frustrated in dealing with larger chains for distribution. In the case of Earl Jeans, Nautica effectively became the distributor. Rowe also said that Sage is currently on the hunt for similar businesses.
Said Rowe, “$75 million to $200 million is our ’sweet spot.’These kinds of companies are very worthwhile to us, but too small for many other entities.”
Sage was founded in 2000 by a group of partners that include managing directors of Wall Street investment banking firms and prominent financiers. It offers a broad range of corporate finance services, including mergers, recapitalizations, management buyouts, divestitures, restructuring and sales of middle market and emerging companies.
The company focuses on several areas, with branded consumer products and apparel at the top of the list. According to Rowe, apparel clients represent 25 percent to 30 percent of their overall business. Previous clients in the apparel industry include Chorus Line and Clothestime Stores. —Darryl James
