M Direct sold to Bestseller for 140 million

In an unexpected twist, TA Associates has agreed to sell M and M Direct Ltd, to Danish fashion retailer Bestseller for 140 million UK pounds. Earlier this month, the UK-based mail-order and online discount retailer announced its plans to float in London. In a communication issued Monday, M and M said the sale

is contingent upon standard regulatory clearance and is expected to be completed within eight weeks.

Britain's M and M has been owned by global private equity firm TA Associates since 2007. Bestseller is owned

by Danish fashion store magnate Anders Holch Povlsen.

This decision has taken the market by surprise, as M Direct - parent group to M and M and owned by global private equity firm TA Associates since 2007 - had been looking to list its shares on the London Stock Exchange's Alternative Investment Market.

M Direct favours sale to Bestseller over London IPO

The group was said to be pursuing a 170 million pounds in funds with the floatation but has instead opted for a disposal to Bestseller, valued at 140 million pounds.

Shareholders in M and M were advised in the deal by Canaccord Genuity Limited and Macfarlanes LLP.

Over fiscal year 2014, over 90 percent of the company's revenue was generated from sales of third party brands with the largest single brand accounting for approximately 7 percent, as revealed by the retailer in the statement presented to the London Alternative Investment (AIM) market earlier this month.

In FY14, M and M Direct reported core revenue of 118.9 million pounds. EBITDA came in at 10.5 million pounds, that's 9 percent and 21 percent up respectively on the prior year.

The offprice retailer was founded in 1987 and stocks brands such as Adidas, Converse, Diesel, Helly Hansen and Ugg at discounts of up to 75 percent. M Direct has established dedicated websites in the UK, Ireland, Germany, France, Austria, The Netherlands and Poland, serving 1.3 million active households as of 14 May 2014.