Singapore-based L Catterton Asia, a consumer-focused private equity firm, has unveiled the merger of two leading swimwear brands - Australia's Seafolly and Colombia's Maaji.
It aims to create an annual US$500 million (S$700 million) speciality swimwear business in five years - with Singapore serving as the distribution hub.
It has just acquired a controlling US$50 million stake in Maaji, which has a presence in more than 54 nations and 12 stand-alone stores across the Americas.
In December 2014, L Catterton Asia acquired a 70 per cent stake in the Sydney-based Seafolly Group for $59 million.
Seafolly sells its products in more than 41 countries, with 22 stores in Australia, six in the United States and four in Singapore.
The deal was signed two weeks ago and completion is slated to be at the end of this month.
L Catterton Asia will be the controlling shareholder of the combined business, with the founders of both brands staying as minority stakeholders. A holding firm will be created here, with Singapore serving as the headquarters for the combined business.
Maaji has a major presence in South America and the US, where 80 per cent of its products are sold.
Seafolly has a strong foothold in Australia and the Asia-Pacific.
By collaborating with Seafolly, Maaji will be able to gain greater access to the markets in Asia.
Maaji benefits from the free trade agreement with the US, while Seafolly currently pays a 25 per cent tax when selling its goods to the US market. Seafolly intends to diversify its supplier base by shifting 50 to 60 per cent of American supplies to Colombia in a year or so.
Maaji focuses more on bohemian styles and is made for women aged 15 to 25. Prices range from US$75 to US$125. Seafolly focuses more on classic styles and targets women aged 25 to 40. Prices range from US$100 to US$150.
Last year, turnover of the two brands reached US$150 million.
L Catterton Asia is looking to triple the sales of the combined business, making Singapore a hub for distribution and doubling its presence here by next year.
This will double the number of Singaporeans employed within a year, from 15 staff now at Seafolly stores here. Maaji will also be looking to set up stores in Singapore.
The combined business will also use e-commerce as part of its growth strategy.
Seafolly has an online business, while the merger gives Maaji the opportunity to further develop its online presence.
To drive e-commerce for both brands, L Catterton Asia brought in Mr Harry Markl, the former chief executive of Zalora, last September.