Authentic Brands Group has decided to postpone its initial public offering to sell a stake in the company for $12.7 billion.

Authentic Brands Group has decided to postpone its planned initial public offering in favour of selling significant stock shares in the company to CVC Capital, HPS Investment Partners, and a group of current shareholders. The transaction, which was announced on Monday, values the company at $12.7 billion.

Clothing shops Forever 21 and Aeropostale, department store chain Barneys New York, men’s suit maker Brooks Brothers, and Sports Illustrated magazine are among Authentic Brands’ portfolio firms. Its deal to buy Reebok, a sneaker manufacturer, is anticipated to finalise early next year, adding another brand to its portfolio.

In early July, the company filed for an initial public offering. Authentic Brands CEO Jamie Salter, on the other hand, said the company will now aim for an IPO in 2023 or 2024. He stated that he has agreed to stay on as CEO for another five years.

In a phone conversation, Salter remarked, “The IPO climate is crazy.” “I believe we would have achieved a much higher valuation than we did when we sold the company.” What’s more, guess what? “I’d rather be alone.”

From eyeglasses maker Warby Parker and fashion rental platform Rent the Runway to eco-friendly shoe brand Allbirds and e-commerce fashion site Lulu’s, a slew of retail startups have gone public in recent months. Investors have picked names with a strong online presence, allowing some to command valuations comparable to high-growth IT firms.

In its initial public offering, Authentic Brands was looking for a valuation of around $10 billion. The deal with CVC and HPS is anticipated to finalise in December, after which the private equity firm and hedge fund will each have a seat on the board of directors of Authentic Brands.

“We intend to cooperate closely with the ABG team to carry out their strategic ambitions, notably in terms of worldwide expansion,” Chris Baldwin, a managing partner at CVC, stated.

According to the company, BlackRock will maintain its position as Authentic Brands’ largest shareholder, which it has had since 2019. Existing investors such as Simon Property Group, General Atlantic, Leonard Green & Partners, Brookfield, and basketball player Shaquille O’Neal will keep their stakes in the company.

Authentic Brands said that its net income in 2020 increased by 2 percent to $211 million from $72.5 million a year earlier, while revenue increased by 2% to $489 million when it filed to go public.