Palamon acquires leading international sock brand, Happy Socks.
Palamon Capital Partners, a pan-European growth investor based in London, has acquired a majority stake in Happy Socks, a Sweden-based international brand of design socks.
The deal was made with Scope Capital, which owned 50% of Happy Socks. As a result, Scope Capital gets 4.7 times its investment cost.
The transaction values Happy Socks at SEK 725 million, with additional SEK 40M ($4.5M) of growth capital being injected to support the continued expansion of the business, leading to a SEK 765 million post-money enterprise value.
At the beginning of 2015, Happy Socks had sold 50% of the company to Scope Capital, which had as a main target the doubling of the company's turnover. The organisation has responded better than expected with 140% revenue growth while maintaining the profit margins.
Founded in 2008 in Sweden by Mikael Söderlindh and Victor Tell, Happy Socks is a globally recognised brand sold in more than 90 countries through more than 10,000 points of sale, supported by a fast growing online channel and an expanding portfolio of own-branded retail stores.
The company has disrupted the global sock wear market by offering high quality, attractively priced, colourful patterned socks promoted through creative point of sale displays, celebrity collaborations and a strong social media presence. Happy Socks has achieved more than 50% revenue and EBITDA annual growth over the last three years, generating retail sales of €100 million in 2016.
Following the transaction, the founders will remain actively involved in the daily operations of Happy Socks.