J Crew, the American casualwear brand, has been sold to private equity firms TPG Capital and Leonard Green & Partners for $3bn (£1.9bn).

Millard ‘Mickey’ Drexler will remain as J. Crew Group chairman and chief executive and a significant shareholder in the brand, according to an announcement on the company’s website.

Under the terms of the agreement, J.Crew shareholders will receive $43.50 (£27.50) per share in cash, up 29% on J Crew’s average closing share price last month.

Shares in J Crew, which is listed on the New York Stock Exchange, soared 17.5% to $44.25 (£27.8) in pre-market trading today, as investors reacted to rumours that a deal was close to being finalised.

Drexler said: “As I have always said, we are in this for the long term and we do what we do day in and day out so we can deliver the best possible products to our customers. I am excited to be partnering with TPG Capital and Leonard Green & Partners on this transaction and that our management team, including our President Jenna Lyons, will continue to work towards our future.”

Carrie Wheeler, Partner of TPG Capital, added: “We are proud of our 13-year history with J.Crew since our investment in the company in 1997 and the success it has achieved. We are looking forward to working with Mickey and his exceptional team and are excited by the prospect of continuing to expand the business.”