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Chinese luxury dealmaker plans IPO for US$2b Lycra unit
ACQUISITIVE Chinese luxury apparel firm Shandong Ruyi Group is planning an initial public offering for The Lycra Co, maker of the elastic material used in yoga pants and skinny jeans.
Ruyi aims to list the business within three years, the group's chief strategy officer, Kelvin Ho, said in an interview Friday in Hong Kong. The Lycra Co owns some well-known brands and has strong cashflow, and a listing would provide a great incentive for staff, Mr Ho said.
The Chinese group added about 3,000 employees through its acquisition of Lycra Co, which it completed on Thursday. The deal brings it brands including Coolmax fibres and Thermolite insulation as well as manufacturing facilities, research centers and sales offices around the globe. Ruyi paid more than US$2 billion for the business, Bloomberg News has reported.
Ruyi finally closed the acquisition of Lycra Co, which was owned by an arm of Koch Industries Inc, after regulatory delays hampered the transaction for months. It completed the purchase just hours before a final deadline ran out on Jan 31, more than 15 months after the deal was announced, a person familiar with the matter said.
The company had initially targeted to close the purchase by the middle of last year. Ruyi chairman Qiu Yafu later pushed the date back, saying in a November interview the company was aiming for year-end.
The deal took over six months longer than expected, in part because Chinese capital controls made it difficult to move funds offshore, according to people familiar with the matter. The regulatory approval process in China and the US also took longer than expected, the people said, asking not to be identified as the details are private.
A representative for Ruyi declined to comment on the reasons for the delay, adding that the regulatory process was normal. The seller, Koch Industries unit Invista, didn't immediately respond to emailed queries outside regular US business hours.
The Chinese company, previously a little-known textile manufacturer, now owns several European luxury brands after purchases including UK trench coat maker Aquascutum and SMCP SA, the French fashion retailer whose labels include Sandro, Maje and Claudie Pierlot.