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Will Birkenstock Sell to LVMH-Backed Private-Equity Firm?

The subject of acquisition interest in recent months, German sandal maker Birkenstock is now said to be favoring a deal with LVMH-backed private equity firm L Catterton.

Birkenstock already has an offer in hand from CVC Capital, another player in private equity. That deal valued the footwear brand last month in the range of over 4 billion euros ($4.85 billion), but talks had been going on for months. While the deal is still on the table, the family owners of Birkenstock are now believed to be leaning toward L Catterton.

CVC has experience in buying fashion-related brands, but L Catterton’s expertise offers some advantages, like a strong network for expansion in Asia. L Catterton on Sunday said ithas  added new team members to lead Southeast Asia investment efforts and earlier-stage investments across India and Southeast Asia. The private-equity firm has had an investment presence in Asia since 2009.

L Catterton’s fashion investments include PepeJeans, Sweaty Betty, Everlane, Rhone and ThirdLove. Formerly Catterton, the private equity firm combined with the investment arm of LVMH to form L Catterton in 2016.

Last month, Birkenstock told Financial Times that interested investors were exploring “opportunities of strategic collaborations, also in combination with financial participation.” Permira, which bought sneaker brand Golden Goose from Carlyle Group last year for $1.56 billion and earlier this month completed the IPO of the Dr. Martens boost brand, is also said to be interested but it isn’t clear if it has submitted a bid.

L Catterton is said to be conducting due diligence in anticipation of making a bid, according to Bloomberg, which first reported on the possibility of a deal Sunday. L Catterton executives did not respond to a query for comment by press time.

Birkenstock launched its sandals in the 1960s, but now it also sells an assortment of products including belts, bags and beds. And with the pandemic still raging, many office workers continue to work from home, fueling demand for simple, comfortable footwear. NPD Group’s Beth Goldstein has said that Birkenstock, along with comfort-oriented brands like Crocs and Ugg, has successfully met the need for comfortable shoes.

Birkenstock footwear is best known for contoured cork footbeds, where suede and jute soles essentially act as orthopedic insoles to cushion feet.