Retailer N Brown is set to be acquired by a company owned by its non-executive director, Joshua Alliance, as it looks to move off AIM.
N Brown, which owns the brands JD Williams and Simply Be, has said the reduced appetite for UK small-cap stocks and the costs associated with its listing make the investment platform unsuitable for the firm.
It said: “Bidco believes that, in light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing.”
It is set to be acquired by a new company owned by Joshua Alliance, a non-executive director.
The company expects the acquisition to be completed in early 2025, subject to shareholder approval.
The 40p per share deal values the company at around £187m, a significant premium to its current market cap of £126m.
Joshua Alliance said that the acquisition would: “Support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business”.
“In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets,” he added.
The company has struggled with macroeconomic headwinds. The company saw its revenue drop by 9.8 per cent to £601m in the 52 weeks to 2 March 2024, while its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 12.5 per cent to £47.6m.
Steve Johnson, interim executive chair and chief executive of N Brown said: “N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business.
“Today’s announcement from Bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown independent directors are therefore unanimously intending to recommend it to our shareholders.”