Walker ties up £1.45bn Iceland deal
ICELAND founder Malcolm Walker and his management team has completed a £1.45bn deal to buy the business from the liquidators of the retail group’s former backers.
The management team entered exclusive talks to acquire the 77% shareholding in Iceland from the liquidators of Icelandic investors Landsbanki Islands hf (“Landsbanki”) and Glitnir hf in February.
The transaction values the business at an enterprise value of £1.45bn.
The Iceland senior management team, comprising Mr Wallker, Tarsem Dhaliwal (finance director), Nigel Broadhurst (buying director) and Nick Canning (executive director for people and customers) will together own 43% per cent of the equity in Iceland, and will have operational and board control.
The deal is backed by an £860m senior debt package funded by Credit Suisse, Deutsche Bank, HSBC, Nomura and RBS, as well as a £250m vendor loan note.
Brait S.A., Lord Kirkham and The Landmark Group have invested alongside the management team and jointly hold 57%.
North West advisers on the deal include Rothschilds’ Manchester office and Grant Thornton.
Mr Walker, who becomes chairman and chief executive of the Deeside Iceland, said: “I am utterly delighted that we have been able to conclude a deal that ensures a secure, independent future for this great British company. I know that this will be warmly welcomed by our 23,000 staff, whose responses to the recent Best Companies survey gave us the supreme accolade of Best Big Company to Work For in the UK in 2012.
“It is also great news for our suppliers and our five million customers, who will continue to benefit from our commitment to bringing them continuous, genuine product innovation, outstanding value and the best service on the high street, together with our unique home delivery service.
“Our new equity partners in the business are like-minded entrepreneurs who share our belief in doing the right thing in the long term interests of our people and customers.
“We all look forward to working with them to build on the outstanding success that Iceland has achieved as one of the UK’s best performing food retailers since the current senior management team returned to the company in 2005.”
Alan Rigby, HSBC’s Head of Corporate Banking for the North West, and part of the bank club deal said: “We are delighted to have the opportunity to support Malcolm and his team in the buyout of this high calibre business.
“Iceland’s leading brand and highly differentiated customer proposition has yielded consistently impressive growth over many years and we look forward to supporting the business through the next phase of its expansion.”
