Clayton wins bid battle for retailer B&M

LONDON Mon Dec 3, 2012 8:07pm GMT

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LONDON (Reuters) - U.S. private equity firm Clayton Dubilier & Rice (CD&R) agreed to acquire a controlling stake in British discount retailer B&M, in a deal valuing the business at 965 million pounds, according to a source familiar with the situation.

Former Tesco boss Terry Leahy, who serves as adviser to CD&R, will also become chairman of the company.

CD&R fought off rivals including Blackstone, Advent, BC Partners and KKR as private equity firms spot value in the discount retail sector that has benefited from belt-tightening.

B&M, owned by brothers Simon, Bobby and Robin Arora, has more than 300 stores throughout England, Scotland, Wales and Northern Ireland, with sales of more than 1 billion pounds and more than 10,000 employees. The sale could catapult the three brothers to become among the richest families in Britain.

The Liverpool-headquartered company sells a range of products including toys, furniture and foodstuffs and has more than 2 million customers a week, according to its website.

"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," David Novak, a partner at CD&R, said in a statement.

Terms of the deal were not disclosed, but Reuters reported last week that bankers were putting together debt packages of around 400 million pounds to back a buyout or 4 to 4.5 times B&M's approximate 90 million pound EBITDA. B&M was advised by Rothschild and CD&R was advised by Bank of America Merrill Lynch.

(Reporting By Anjuli Davies and Sophie Sassard, editing by Maureen Bavdek)

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