B&M float to fuel major expansion
DISCOUNT retailer B&M Bargains has said it will raise £75m in a stock market float that will position it for European expansion.
Details, such as the offer share price and the number of shares to be sold were not disclosed, but the flotation is expected to value the company at more than £2bn.
A prospectus with further details is expected soon.
The float will provide a partial exit for Clayton Dubilier & Rice which bought into the business in a near £1bn deal in late 2012. Manchester entrepreneurs Simon and Bobby Arora will retain most of their shares and continue to lead the business, which is based in Speke, Liverpool.
The retailer, which sells everything from food to greenhouses and trampolines, has grown to 373 stores and 17,000 staff across the UK since being founded in Blackpool in 1978.
In the year to the end of March the business saw earnings before interest, tax, depreciation and amortisation (EBITDA) jump 24% to £130m on sales of £1.27bn, up 28%. Like-for-like revenue growth is up 6.5%.
The target is for 850 UK stores and European expansion which started in March with the acquisition of German retailer Jawoll which has revenues of £131m.
In a statement the group said: “In exploiting the opportunities in European discount retail, B&M aims to replicate the success of Dollar General in the US and the business models of both companies share many similarities. Dollar General has a 20-year track record of growth in the US and today has more than 11,000 stores with revenues of over $17bn.”
Chief executive Simon Arora said: “B&M comes to the market with a strong track record of growth in revenues, profits and cashflow and has a proven business model that offers customers sensational value. We have built a high-growth retailer which customers love and which has so much potential still to be realised – approximately 66% of the population does not have easy access to a B&M store and we believe there is room for around 850 stores across the UK.
“Over recent years the UK has witnessed a sustained structural shift towards value retailing among consumers. Shopping habits have changed permanently as a result, with B&M completing about 2.7 million transactions a week. As the success of Aldi and Primark demonstrates, everyone loves a bargain. By leveraging a lean, cost-efficient business model, with strong supplier relationships and direct sourcing, we give our loyal customers what they are looking for across a range of different price points and categories.
“The team are very excited by the opportunity to grow the business even further, both in the UK and in Germany, following our recent acquisition of a majority stake in JA Woll, a transaction that presents significant opportunities particularly in sourcing, and meaningful roll-out potential.”
