Together with the private investment firm Searchlight Capital Partners, L.P., (“Searchlight”), Roots (the “Company”) Co-Founders Michael Budman and Don Green announced today that they have concluded a formal agreement with Searchlight to make a significant investment in the Company to support the brand’s next phase of growth. As a result of the investment, Searchlight will hold a majority stake in the Company.
Michael and Don, together with their wives, Diane Bald and Denyse Green, both of whom have played important roles at Roots over the last 42 years, welcome this new development for Roots, which they co-founded in Toronto in 1973. One of Canada’s leading lifestyle brands employing more than 1,500 people in Canada; the Company has 220 retail locations in Canada, the United States and Asia, along with a robust ecommerce business. With its strong local and international relationships, as well as its experience investing in other heritage brands, Searchlight believes it can add significant value to Roots as the Company continues to expand.
“Don and I are extremely excited about this new development because of what it means for the future of Roots,” said Michael Budman. “Before making this decision we had extensive discussions and meetings with Searchlight’s co-founders, Erol Uzumeri and Eric Zinterhofer, over a period of several months. We were impressed by how well they understood and respected our brand. Not only do they have relevant experience, international expertise and financial resources to draw on, but they are also committed to Roots staying true to its longstanding values, culture and quality products.”
Don and Michael will remain actively involved in Roots and will be substantial shareholders.
“We are thrilled by this partnership,” added Don Green. “We have partnered with the Searchlight team as a result of their passion for Roots and their strong consumer experience with other exceptional brands. We are excited about the future of Roots and looking forward to working in collaboration with Erol, Eric and the rest of the team at Searchlight to realize the brand’s significant growth potential.”
“Our investment will enable Roots to support its long-term growth ambitions,” said Canadian Searchlight co-founder Erol Uzumeri. “As one of the few iconic Canadian heritage brands, we see significant growth potential for Roots in both Canada and internationally across multiple distribution channels. We look forward to working with Michael and Don and the rest of the Roots team.”
Advisors to Don and Michael in the transaction include Goodmans LLP (legal counsel), Generation Capital (financial advisors), WBM Partners LLP (financial and tax advisors), and Threadstone Partners LP (financial advisors). Advisors to Searchlight Capital Partners in the transaction included Torys LLP (legal counsel), Northwest Atlantic (Canada) Inc. (retail estate advisors), KPMG (financial and tax advisors), AON (insurance advisor), Category One (commercial advisors). The Toronto-Dominion Bank is providing debt financing for the transaction.
Established in Toronto in 1973, Roots is Canada’s leading lifestyle brand, recognized around the world for its quality merchandise – leather bags, footwear, jackets, apparel, athletic wear, accessories, and home furnishings. Roots has 220 retail stores in Canada, the United States and Asia, in addition to a successful ecommerce business. It also has a state-of-the-art factory and distribution centre in Toronto, both located near the company’s headquarters where all Roots products are designed.
About Searchlight Capital Partners, L.P.
Searchlight is a global private investment firm with offices in Toronto, New York and London. Searchlight seeks to invest in businesses where its long term capital and strategic support accelerate value creation for all stakeholders. For more information, please visit www.searchlightcap.com.