Gibraltar Growth Corp., one of the country’s six special-purpose acquisition companies (SPACs), has announced a qualifying transaction: Subject to shareholder approval, it will acquire Montreal-based LXR Produits de Luxe International.
The transaction will introduce LXR as a publicly listed company and create a platform to further develop LXR’s position as a leading international omni-channel retailer of branded vintage luxury goods.
The deal, which is Gibraltar’s qualifying acquisition, reflects a purchase price of $82.5 million. As a result of the acquisition, expected to close in June, LXR will become a publicly-listed company led by its founders, Fred Mannella and Kei Izawa.
Founded in 2010 as a private label wholesaler of vintage luxury products, LXR sources and authenticates high quality pre-owned products and sells them through a retail network of stores located in department stores in Canada, the US, and Europe, as well as through its own e-commerce website, www.lxrco.com. LXR offers pre-owned or vintage products from iconic luxury brands such as Hermès, Louis Vuitton, Gucci and Chanel, among others.
At the end of 2016, LXR’s retail network of 46 store locations extended across five retail partner department store banners. The e-commerce site, launched in 2013, had over 70,000 active subscribers by the end of 2016 and sold products to online customers in over 13 countries.
Gibraltar Growth is a special purpose acquisition corporation incorporated under the laws of the Province of Ontario for the purpose of effecting an acquisition of one or more businesses or assets, by way of a merger, amalgamation, arrangement, share exchange, asset acquisition, share purchase, reorganization, or any other similar business combination involving Gibraltar Growth.
Gibraltar and LXR have known each other for almost 10 months. Last June, Gibraltar Ventures Fund One LP, which is part of the Gibraltar Group, invested $3.25 million into LXR.
The transaction will be done on an all-paper basis, meaning none of the cash from Gibraltar’s IPO will be used to buy out the shareholders of LXR. Instead, the cash will be retained to help to build out the stores and to expand the company’s e-commerce activities. Currently only about 5 per cent of its $21.9 million in net revenue comes from e-commerce.
In an interview, Cam di Prata, a former executive vice-president at National Bank, and co-CEO at Gibraltar, said, “this (type of transaction) is what a SPAC was made to do (namely) capitalize a growth company.”