TIDMBME
RNS Number : 6695E
B&M European Value Retail S.A.
19 October 2018
19 October 2018
B&M European Value Retail S.A.
Acquisition of Babou Stores Group in France
B&M European Value Retail S.A. ("B&M"), the UK's leading
leading general merchandise value retailer, today announces the
acquisition by its subsidiary, EV Retail Limited, of the entire
issued share capital of Paminvest SAS a discount general
merchandise retailer group operating with a chain of 95 stores
under the trading name Babou in France (the "Babou Stores Group" or
"Babou").
For the year ended 31 January 2018 the Babou Stores Group
delivered Revenues of EUR347.1m, EBITDA of EUR24.7m, Profit before
tax of EUR0.1m (after goodwill amortisation EUR10.7m) and had Gross
Assets of EUR289.4m as at 31 January 2018. It operates in the
discount retail sector, with c30,000 general merchandise, seasonal
and textiles SKUs. Babou's stores are predominantly located at out
of town sites with an average c.27,000 sq ft of retail space,
compared to B&M's UK average of c.19,500 sq ft.
The total enterprise value of the transaction is EUR91.2m, which
includes the debt of the Babou Stores Group refinanced by B&M.
The consideration was paid in cash financed by an additional loan
facility. There is no deferred consideration payable in relation to
the transaction. The transaction was completed today.
The acquisition of the Babou Stores Group will provide a base
which will enable B&M to develop and grow in France its proven
and profitable value retail model. B&M's strategy for the Babou
business is to apply B&M's direct product sourcing and limited
assortment SKU model, while refining Babou's product offering. The
average store size, location and customer base of Babou are
comparable to the highly successful B&M Homestore operation in
the UK. The French market, alongside the existing German and UK
markets in which B&M operates, has attractive dynamics
including overall market size, the popularity of the growing
discount channel and the healthy operating margins achieved by
several incumbent operators.
The Babou Stores Group is currently led by Thierry Morter. Mr
Morter is retiring from the business as part of the transaction,
and is today succeeded by Cedric Mahieu as CEO. Mr Mahieu has been
employed by B&M since January 2018 in expectation of this
transaction and has been working with the B&M team to develop
the integration plan for Babou. The Seller of the Babou Stores
Group is PIM Participations SAS, a private family owned investment
company in France.
The acquisition is expected to be immediately earnings
enhancing. However, the first 12 months of ownership will be a
period of transition as the acquired business realigns its product
offering closer to that of B&M, which will impact the level of
Babou's earnings in the short term.
At the same time as the transaction, the third party
distribution services provider to the Babou Stores Group, has been
acquired by the Babou Stores Group from Logitex Sarl and Terrealame
which are privately owned companies in France, on a debt free basis
for an additional cash consideration paid by the B&M Group of
EUR2.9m. As at 31 December 2017 the EBITDA of the distribution
services operations were EUR0.7m, Profit before tax EUR0.6m and the
Gross Assets were EUR1.5m.
Simon Arora, CEO of B&M commented:
"B&M has made no secret of its European growth plans since
its IPO in 2014. We are delighted that discussions with Babou over
a 3 year period have led to today's transaction, which provides us
with a platform for future growth in a large and attractive market
whilst also providing a stable and logical new owner for Babou. We
would like to welcome all Babou's employees and stakeholders to the
wider B&M family and look forward to a successful future
together."
The acquisition of the Babou Stores Group (including the related
distribution services operations) constitutes a Class 2 transaction
for the purposes of the UK Financial Authority's Listing Rules,
and, as such does not require B&M shareholders' approval.
B&M was advised on the transaction by BofA Merrill Lynch,
Ernst & Young and LPA-CGR Avocats, with Debevoise &
Plimpton advising on acquisition financing. The acquisition
financing was provided by BNP Paribas.
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation.
Enquiries
B&M European Value Retail S.A.
For further information please contact +44 (0) 151 728 5400
Simon Arora, Chief Executive Officer
Paul McDonald, Chief Financial Officer
Steve Webb, Investor Relations Director
Investor.relations@bandmretail.com
Media
For media please contact +44 (0) 207 379 5151
Maitland
Daniel Yea
bmstores-maitland@maitland.co.uk
Notes to editors
B&M European Value Retail S.A. is a variety retailer with
591 stores in the UK operating under the "B&M" brand and 269
stores under the "Heron Foods" brand, and 88 stores in Germany
primarily operating under the "Jawoll" brand as at 29 September
2018. It was admitted to the FTSE 250 index in June 2015.
The B&M group was founded in 1978 and listed on the London
Stock Exchange in June 2014. For more information please visit
www.bmstores.co.uk
Merrill Lynch International ("BofA Merrill Lynch"), a subsidiary
of Bank of America Corporation, is acting exclusively for B&M
in connection with the acquisition and for no one else and will not
be responsible to anyone other than B&M for providing the
protections afforded to its clients or for providing advice in
relation to the acquisition
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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