B&M, the UK discount retailer chaired by former Tesco boss Sir Terry Leahy, has firmed up plans for a flotation in London before the summer, joining the growing ranks of retail companies eyeing a listing this year amid buoyant stock markets in Europe.
Clayton Dubilier & Rice, the New York-based buyout house that owns the retailer, has lined up Goldman Sachs and Bank of America Merrill Lynch – in addition to Lazard – for an initial public offering as soon as June, according to three people with knowledge of the matter.
The listing would take place in the wake of Poundland, Pets at Home and Russian retailer Lenta, all private equity-backed retailers, seeking to float on the London Stock Exchange before Easter.
The move, which comes sooner than expected, is evidence of how private equity groups are accelerating IPO plans for their portfolio companies to tap welcoming stock markets. CD&R bought a controlling stake in B&M a year ago in a deal that gave the company an enterprise value of around £965m, including debt, people with knowledge of the terms said at the time.
Buyout fund managers typically own companies for three to five years to implement operational changes or expand them through acquisitions or organically before selling them.
CD&R declined to comment. The buyout fund manager acquired 60 per cent of Liverpool-based B&M from the Arora family. The retailer opened its first store in Blackpool, Lancashire, in 1976, and now operates more than 300 stores in the north of England, Scotland, Northern Ireland and Wales. The chairmanship was Sir Terry Leahy’s first senior job in retail since standing down as Tesco chief executive in 2012.
The Arora brothers, who bought the retailer in 2005, were among the early wave of western entrepreneurs to travel to China in search of cheap goods to sell back in the UK. Their Orient trading business, founded in 1997, designed, imported and distributed soft furnishings, household items and gifts for big retailers. In 2000 it was sold to Lambert Howarth, the footwear and homeware supplier, netting them £35m.
CD&R, which is raising a $5bn buyout fund, has separately hired STJ Advisors to advise on a possible IPO of Spie, a French engineering group, and is also considering a flotation for Exova, a UK testing and calibration service provider for the oil, pharmaceutical and food industries.
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