TIDMBME
RNS Number : 8566M
B&M European Value Retail S.A.
02 August 2017
2 August 2017
B&M European Value Retail S.A.
Acquisition of Heron Food Group Limited
B&M European Value Retail S.A. ("B&M"), the UK's leading
multi-price value retailer, today announces the acquisition by its
subsidiary, EV Retail Limited, of the entire issued share capital
of Heron Food Group Limited ("Heron") a discount convenience
retailer operating predominantly in the North of England with 251
stores.
For the year ended 31 December 2016 Heron delivered Revenues of
GBP274.4m, EBITDA of GBP19.1m, Profit before tax of GBP8.6m and had
Gross Assets of GBP93.5m as at 31 December 2016. Like-for-like
revenue growth in the year was 3.0%. The business currently employs
c.3,800 people and has c.1,200 SKUs, including ambient, frozen and
chilled foods. Heron's stores average c.2,500 sq ft of retail space
compared to B&M's UK average of c.19,000 sq ft.
The total enterprise value of the transaction is GBP152m
including the debt assumed of the Heron group. An initial cash
consideration of GBP112.1m was paid by B&M on exchange and
completion of the acquisition today. Up to GBP12.8m of deferred
cash consideration may become payable based on the EBITDA
performance of the Heron group up to 31 March 2019; this is
included in the GBP152m enterprise value figure. The initial cash
consideration was satisfied from B&M's existing cash resources
and facilities.
The acquisition of Heron will enable B&M to develop and roll
out a complementary, proven and profitable discount convenience
grocery brand. The customer profiles of Heron and B&M are
similar and both formats are expanding successfully. Convenience is
one of the areas of growth in grocery retailing today, although
much of this growth to date has been based on premium pricing. The
Board of B&M believes that Heron's expertise and attractive
existing store portfolio, when supported by B&M's proven
sourcing, retailing and store roll-out capabilities, can bring an
attractive new customer value proposition in an expanding sector of
the grocery market.
Heron is currently managed and owned by Andrew, David and
Michael Heuck. Michael Heuck is retiring from the business as
planned, whilst Andrew and David Heuck remain in their existing
trading and finance roles with Heron. B&M, alongside the
existing Heron management team, will continue to expand and develop
the Heron business, initially through the addition of between 10
and 20 new stores per annum.
The Board expects the acquisition to be immediately earnings
enhancing.
Simon Arora, CEO of B&M commented:
"B&M is already the UK's leading general merchandise
discount retailer, serving 4 million shoppers per week. The
addition of a complementary, proven discount convenience grocery
brand to our own structural growth story gives the combined
business an even longer, exciting growth runway. I look forward to
working with David and Andrew Heuck and the Heron team to drive
forward our shared ambition to deliver exceptional value for money
to shoppers across the UK."
David and Andrew Heuck commented:
"We are delighted to be joining forces and working with B&M.
Both companies share a vision to bring great value to customers and
the combination of Heron's skills with the expertise and resources
of B&M will mean the creation of a potent new force in the
structurally growing convenience sector. Today's transaction
secures for Heron's loyal and hardworking workforce a perfect long
term home within the B&M Group and provides an exciting
platform for the roll-out of more Heron stores nationally."
The acquisiton 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 by BofA Merrill Lynch, PwC, Addleshaw
Goddard and Gordons.
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation.
An analyst conference call in relation to the transaction will
take place on Wednesday 2 August 2017 at 11.00am (UK). Please
contact Maitland on 0207 379 5151 for further details.
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
Tom Eckersley
Robbie Hynes
bmstores-maitland@maitland.co.uk
Notes to editors
B&M European Value Retail S.A. is a variety retailer with
543 stores in the UK operating under the "B&M" brand and 79
stores in Germany primarily operating under the "Jawoll" brand as
at 24 June 2017. 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 company news service from the London Stock Exchange
END
ACQUUABRBUAWRRR
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