Berkshire Takes Over William Carter Co.

In a more orthodox leveraged transaction, Berkshire Partners signed a definitive agreement to buy William Carter Co. and its premier Carter’s and Carter’s Classic brands of apparel for babies, toddlers, and young children. Berkshire is paying $450 million to acquire Morrow, Ga.-based William Carter, including a $130 million equity investment, from Investcorp in a recycled LBO. Berkshire, with extensive experience in owning and managing retailing and consumer goods companies, believes that the 136-year old Carter is a natural fit and sees strong potential for expanding the famous brand. William Carter posted sales of $471.4 million in 2000, nearly 50% greater than the volume when it was purchased by Investcorp in 1996. Sales through Carter’s own 149 outlet stores accounted for $215.3 million of last year’s total. The largest branded marketer of baby and toddler apparel, Carter also sells its wares through 500 department and specialty store companies, “representing an estimated 8,000 store fronts.” “The brand is a terrific brand and it has more opportunity in front of it,” says Berkshire’s Jones. “It has an excellent management team and the management has developed multiple avenues of growth that we’re excited about pursuing with them.” Opportunities, he says, can emerge from developing new products with the Carter’s brand and pushing the products through new marketing channels. “We’ve done a lot in retail and we really like their concept,” Jones adds. “We’ve done a fair amount from a consumer products standpoint with companies that have brands. We understand how to build around a core brand, improve the core market and the core products’ position, and develop manufacturing capabilities around that.” Berkshire says that it expects to close the deal in the third quarter. Carter has publicly traded bonds that will be refinanced.