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Australia’s Gresham sells Witchery to Country Road for A$172m

1 Aug 2012

Australian buyout firm Gresham has agreed to sell fashion retailer Witchery Group to trade buyer Country Road for A$172m ($181m).

The company – which operates Witchery and Mimco stores in Australia, New Zealand, Singapore, South Africa and the UK – was bought out by Gresham in 2006 for reported ballpark figure of between A$115m and A$130m.

Witchery generated revenues of about A$266m last year and normalised EBITDA of about A$34m.

Country Road said it will partly finance the deal through an A$92m capital raising that will allow shareholders to buy one new share for every two existing shares at an offer price of A$2.66, representing a 19 per cent discount to Tuesday’s closing price.

The transaction, which will also be financed through a new A$92m five-year senior bank facility, could create significant shareholder value through synergies estimated at about A$10m on an annualised basis over four years, Country Road said in a statement on Wednesday.

“The acquisition of Witchery Group creates one of Australia’s largest specialty fashion retailers with complementary brands and a strong position in the mid to upper tier specialist retail sector,” Country Road chairman Ian Moir added.

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