This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Lululemon Founder Sells Half His Stake to Advent

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.

Advent managing partner David Mussafer and managing director Steven Collins, both previous directors at the retailer, will join Lululemon's board after the sale of the stock closes. Mussafer will additionally become co-chairman, sharing the title with Casey.

Advent and founder Wilson have agreed to a standstill agreement for Lululemon's 2015 and 2016 annual shareholder meetings as part of the stake sale.

Advent and Wilson agreed not to support an acquisition of the company or a change of control, tender offer or exchange offer for the same 18 month time period without the board's consent, according to the agreement.

Goldman, Sachs & Co. served as financial adviser to Wilson.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
LULU $63.11 -1.40%
AAPL $123.80 -0.51%
FB $81.10 -1.40%
GOOG $543.96 -0.74%
TSLA $187.12 -0.87%


DOW 17,610.17 -165.95 -0.93%
S&P 500 2,051.16 -16.73 -0.81%
NASDAQ 4,849.6980 -51.1870 -1.04%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs