Just seven months after its $570 million takeover of Cole Haan, Apax Partners is planning to add more debt to the footwear company so it can fund a payment to itself, The Post has learned.
The buyout shop put roughly half the money down in the acquisition — around $280 million — and financed the rest by borrowing against the shoe and handbag brand.
Apax plans to refinance the debt with a bigger $350 million loan and declare roughly $60 million of that as a dividend, giving it about a quarter of its down payment back, according to one source. Apax declined to comment.
Dividend deals — in which companies take on more debt to repay their PE owners — are becoming more common as firms race to take advantage of low interest rates even though they raise the risk of default.
In November, Nike agreed to sell Cole Haan to Apax, which has increased the brand’s earnings before interest, taxes, depreciation and amortization by almost 20 percent to $75 million for the year ended May 31, said a source who has seen the presentation to lenders.
Much of the increase derives from not paying the fees that Cole Haan — like other Nike brands — used to pay to the parent company, along with better inventory management, the source added.
Apax also brought in former Converse head Jack Boys to oversee Cole Haan, which is launching a new ad campaign, opening stores and embarking on a global expansion to include China.