|
Articles with HMA Quotes BRUCE KLATSKY'S NEXT CHAPTER: FINANCIAL PLAYER
Daily News Record
Jean E. Palmieri
10 October 2005
NEW YORK -- Retirement didn't last long for Bruce Klatsky.
The former CEO of Phillips-Van Heusen has surfaced as a partner in a new private equity firm called LNK Partners, which is expected to be involved in the acquisition of retail and apparel companies.
Klatsky, who officially stepped down from PVH at its annual meeting in June, is now working with two former executives of Apax Partners, the private equity firm that owns 38 percent of PVH and helped finance the company's 2003 purchase of Calvin Klein Inc. They are David Landau, who was on the board of directors of PVH until stepping down in June, and Henry Nasella, who joined Apax after a successful retail career that included posts as president and COO of Staples and chairman and CEO of Star Markets, a regional supermarket chain.
At Apax, Landau established and led the company's U.S. consumer and retail group, and was a member of its investment and operating committees, according to the LNK Web site.
Other principals in the White Plains, N.Y.-based company are H. Christopher Frigon, formerly a principal at Crimson Investment LLC, a middle-market private equity firm focused on consumer products and industrial equipment; and Bethany Zangrillo, director of operations, who was formerly with Gartner Inc., a technology research and advisory firm.
Gilbert Harrison, chairman of Financo Inc., said Klatsky and Landau had been "extremely good friends for many years, and that friendship and trust were the driving force behind Apax's investment in PVH and its subsequent purchase of Calvin Klein."
The private equity business is a hot commodity right now, as firms clamor to spend what banking sources estimate is over $100 billion in available funds. So far, activity has been frenzied in 2005. According to Mergerstat, a research firm, at the close of the third quarter there had been 1,868 mergers and/or acquisitions in the consumer goods, apparel and retail sectors, which compares with 1,845 deals in the same period last year. The largest number of transactions has been at retail, which had 1,158 mergers and/or acquisitions at the close of the third quarter. In 2004 there were 1,111 in the sector in the same period. In the apparel sector, there have been 189 deals so far, compared with 179 last year.
Harrison said: "There is a huge amount of capital out there to fund deals today -- it's absolutely unbelievable. By last count, there was $110 billion in unutilized, but committed, funds to buy companies in the private equity world. And they have to put this money to work within a five-year horizon or the funds revert back to the investor and can't be used. As a result, there has been a flurry of activity with private equity funds paying higher prices than strategic buyers."
Hal Reiter, chairman and CEO of Herbert Mines Associates, a leading executive search firm, agreed, adding that private venture firms have discovered that there are "higher ROIs [returns on investment] in controlling companies than buying equities," so deals such as the $5.1 billion Texas Pacific/Warburg Pincus acquisition of Neiman Marcus or Sun Capital's purchase last week of Goody's Family Clothing Co. are becoming more commonplace.
"Everybody is crawling all over David's Bridal and Kate Spade," said Reiter, referring to the two divisions being divested by Federated Department Stores and Neiman Marcus Group, respectively. And the retailers are receptive to selling to financial firms because of the multiples they will receive. "They realize that by selling to private equity firms they will be getting the highest value for the company," Reiter said.
Referring to Klatsky, Reiter said that after 30-plus successful years at PVH, a career that "concluded with the extraordinarily successful acquisition of Calvin Klein, this is a logical place for him to land."
PVH's stock has skyrocketed over the past four years, Reiter said, rising from $8 in October of 2001 to around $30 last week. "That was the capping of his career."
Reiter speculated that Klatsky will help LNK "do due diligence on the companies they're interested in and then serving as a director of those they acquire."
Klatsky did not return calls to comment last week.
In June, Klatsky, 56, turned the reins of PVH over to Mark Weber, his longtime number two and the company's former president and COO. Klatsky had spent 33 years at the company, the final 12 as chairman and CEO. In addition to Calvin Klein, he was also instrumental in the acquisitions of Izod, Gant, Bass and Arrow.
When announcing his impending departure from PVH in March, Klatsky said he planned to focus much of his attention on Human Rights Watch, an independent, nongovernmental organization he has been involved with for a decade. He continues to serve on the group's board of directors.
|
