$129 million injected into Xtep to boost K-Swiss, Palladium growth
Quanzhou, Fujian-headquartered Xtep International Holdings, owner of sports footwear brands K-Swiss and Palladium, as well as Xtep Sports, is due to receive a capital infusion to the value of $129.4 million (HK $1 billion) from Asia-focused private equity firm Hillhouse Capital Group.
According to local media reports, the aim of the investment is to support Xtep in increasing its global market share through the promotion of its K-Swiss and Palladium brands following slowed earnings growth last year.
Hong Kong stock exchange filings suggested that two tranches of convertible bonds will be issued by Xtep International subsidiary Xtep Global to offshore investment vehicles managed by Hillhouse.
The sportswear manufacturer’s stock reportedly rose by a record 21% following the news, which also said that the bonds can be converted into a 20% stake in Xtep Global (thus reducing Xtep International’s ownership of the subsidiary to 80%).
In a separate statement seen by local media, Xtep chairman and chief executive, Ding Shui Po, said: “We are highly confident in both our proven business strategies and the forward development prospects of the group and our K-Swiss and Palladium brands, in particular, with this partnership and support from Hillhouse.”
Image: Xtep Sports via Instagram.
