NEW YORK (The Deal) -- Chip Wilson, the founder of Lululemon Athletica (LULU - Get Report), has inked a deal to sell about half of his 27.7% stake in the yoga wear retailer to private equity firm Advent International for $845 million.
The transaction brings to an end speculation about what might happen to the embattled Vancouver-based company, including the specter of a potential leveraged buyout of the retailer.
Advent's stake will be about 20.1 million shares, or 13.85%. As part of the agreement the firm will get two seats on a board expanded from 10 directors to 12. Wilson, likewise, will retain his board seat as well as the same stake as the PE firm.
The private equity firm likely was a front runner for the stake, given its history with the clothing chain. It first invested $74 million back in 2005 for a 38.1% stake and worked with chairman Michael Casey and Wilson to grow the business into a brand that became not only well known in its home country, but also in the U.S.Advent fully exited Lululemon in 2009, two years after Lululemon's 2007 initial public offering. At the time of the IPO, Advent generated nearly an 8 times return on its original investment. Having a relationship with all the various parties meant they were more comfortable having Advent in the board room. "The Lululemon Board is pleased that Chip and Advent are partnering in this transaction," said Casey, in a statement.
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