Lululemon Athletica founder Dennis “Chip” Wilson announced last week that he agreed to sell half of his stake in the yoga wear company to private equity firm Advent International for $845 million.
Under the agreement, Advent International will receive 13.85% of Wilson’s 27.7% stake, along with two board seats. Advent managing partner David Mussafer and managing director Steven Collins will be appointed to these roles, expanding the board to 12 members.
Following the purchase, Wilson and Advent will together own approximately 20.1 million shares of Lululemon common stock. Mussafer will also serve as co-chairman of the board and sit on the board’s Nominating and Corporate Governance Committee. Collins will serve on the Board’s Compensation Committee. Laurent Potdevin remains the chief executive officer of the athletic apparel brand.
The agreement also stipulates that both parties will employ an independent expert to guide the company’s board committees, policies and procedures during the first 90 days after the stock purchase is completed.
Advent is no stranger to Lululemon. The company originally invested in Lululemon in 2005 and helped it grow into a globally recognized athletic apparel brand. Advent ended its investment in 2009. Mussafer and Collins were directors on the board during this time.
Wilson said in a statement, “Advent is a strong partner that knows Lululemon and our culture and will be an incredibly helpful addition to the Board as we build an even stronger company.”
The New York Times reported that the deal is an attempt to resolve issues between Wilson and the rest of the company, that have been going since the controversial Luon yoga pants scandal in 2013. When customers complained that the brand’s Luon pants were too sheer, Wilson admitted that the company had made a design mistake. However he also said the pants don’t work for some women’s bodies. The flub caused a major decline in sales and in the company’s shares’ value, ultimately leading to Wilson’s resignation as chairman of the board last December.