A company controlled by Joshua Alliance has agreed to buy Manchester-based clothing and footwear digital retailer N Brown Group in a cash deal that values the company at about £191 million.

Alliance is a member of the company’s founding family. The deal would take the company private as it delists from the AIM market.

N Brown’s retail brands include Simply Be, JD Williams and Jacamo. The company employs over 1,700 people.

Joshua Alliance already owns about 6.6% of N Brown’s issued shares, while other members of the Alliance family own a further 53.4%.

The deal offers 40p in cash for each share, valuing the whole of N Brown at about £191 million on a fully diluted basis. That is a premium of approximately 48.1% to the recent closing price of 27p.

Bidco, the company formed to make the acquisition, said: “In light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing.

“Furthermore, Bidco believes that the acquisition presents an opportunity to acquire a portfolio of well-established fashion brands, supported by an innovative financial services platform that is currently under development, with a long history and heritage in the UK clothing and footwear market.

“Bidco believes that it can support N Brown in accelerating its long-term growth potential, and that it can provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.

“Given Bidco’s ambitions and the associated capital requirements of executing on its plans for N Brown, Bidco believes that N Brown is better able to achieve its growth potential as a private company than as a public company, taking into account the dynamics of the markets in which N Brown operates, and the broader competitive landscape.

“Bidco has confidence in N Brown’s current executive team and its leadership. Bidco plans to support the existing executive team’s strategy and intends to work with N Brown’s current executive team to develop, enhance and implement that strategy following completion of the acquisition.

“Bidco notes that Steve Johnson (interim chair and CEO) and Dominic Appleton (CFO), being each of the N Brown Independent Directors who holds N Brown Shares, have agreed to elect for the Share Alternative in respect of all of their current holdings of N Brown Shares. Bidco believes that this demonstrates the confidence that the current executive team has in the future prospects of the N Brown Group.”

If shareholders agree, the cash acquisition will be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

Joshua Alliance said: “My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business.

“I am delighted to continue that history. This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.

“In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets. I am excited about the opportunities created by this portfolio of well-established fashion brands, supported by an innovative financial services platform and its talented executive team and employees.“

Steve Johnson, Interim Executive Chair and CEO of N Brown said: “N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business.

“We continue to deliver on our strategy for growth, enabled by a sustainable and efficient operating model, and supporting our people and talent.

“Today’s announcement from Bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown Independent Directors are therefore unanimously intending to recommend it to our shareholders.”