Russian billionaire snaps up Holland & Barrett in £1.8bn deal

Russian billionaire snaps up Holland & Barrett in £1.8bn deal

L1 Retail, the retail investment arm of LetterOne, has agreed to purchase Holland & Barrett for £1.77bn.

The transaction is expected to close by September 2017 subject to customary regulatory approvals.  Further financial terms were not disclosed.

Originally founded in 1870, Holland & Barrett has since grown to become Europe’s largest health and wellness retail chain with stores in more than 1,150 locations worldwide.

The company’s annual revenues in 2016 exceeded £610m, marking 32 consecutive quarters of like-for-like growth in the business, helped by significant investments into new store openings.

Peter Aldis, CEO, Holland & Barrett, said: “We are delighted to now be in partnership with the L1 Retail team and its advisory board of internationally-renowned retailers. 

“We have upgraded much of our core store portfolio to concept stores to deliver additional in-store theatre and increased customer engagement.

“New products launched through our ethical sourcing programme have also been a key growth driver helping to underpin our substantial investment to gain presence across an increasingly global Health and Wellness market.

“We are particularly proud that our international business last year received the Queen’s Award for International Trade. Carlyle has been a great partner for Holland & Barrett over the last few years, investing in the brand, our people, and next generation technology, which has driven our growth. We look forward to building on this track record as we enter the next chapter with L1 Retail.”

The L1 Retail investment team aims to leverage its strong track record in retail to buy and build the next generation of retailers internationally. Led by managing partner Stephan DuCharme, and supported by an advisory board of internationally renowned retail leaders - Karl-Heinz Holland, Clive Humby and John Walden – L1 Retail aims to add value through its deep sector and strategic expertise as well as its familiarity with data and financial markets.

Commenting on the acquisition, DuCharme added: “Holland & Barrett is a clear market leader in the UK health and wellness retail market, with attractive growth positions in other European and international markets, and growing online presence, with a leading customer loyalty programme and 10 million active cardholders.

“We look forward to working with Peter and his strong management team. We believe that the company is well positioned to benefit from structural growth in the growing £10bn health and wellness market and has multiple levers for long term growth and value creation.”

Carlyle was advised by Goldman Sachs, Houlihan Lokey, UBS, PWC, Latham Watkins LLP, and OC&C.

Published: 26 June 2017

Article by Bryce Wilcock
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