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Clayton, Dubilier & Rice clinches B&M Bargains deal

4 Dec 2012

US-based buyout firm Clayton, Dubilier & Rice has clinched a hotly anticipated deal to buy a significant stake in Liverpool, UK-based discount retailer B&M Bargains.

Although financial terms of the transaction were not disclosed, reports – which also previously linked Advent, Blackstone, BC Partners, KKR, Cinven, Apax Partners and CVC to the sale process – suggest the deal values B&M at about £965m.

The exact size of the stake was not disclosed.

B&M is owned by the Arora family and is one of the UK’s leading discount retailers, with stores situated in the north of England, Scotland, Northern Ireland and Wales.

Since its acquisition in 2005, the business has grown to over 300 stores that attract over two million customers per week and more than 10,000 staff on its payroll.

The chain is expected to make underlying profits of £90m this financial year on sales of over £1bn.

“B&M is a fantastic retail format in the growing discount sector,” said CD&R partner David Novak.

“We are pleased to have the opportunity to partner with the management team to accelerate the growth of the business by widening its market presence outside of the UK, and continue to build the B&M brand.

“We believe the value based general merchandise retail model could have significant appeal in overseas markets.”

Former Tesco chief executive and current CD&R senior operating advisor Sir Terry Leahy will serve as chairman of B&M following the deal.

The company will continue to be managed by its existing management team.

CD&R was advised by Bank of America Merrill Lynch, Clifford Chance, Debevoise & Plimpton, Ernst & Young and Bain & Co, while B&M was advised by Rothschild, Allen & Overy, PWC and OC&C.

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