Advent buys DFS in £500 million deal

LONDON (Reuters) - Private equity firm Advent International is buying sofa retailer DFS in a deal one person familiar with the process said was worth about 500 million pounds.

Advent whose retail investments include Poundland and Fat Face in the UK, Charlotte Russe in North America and Takko in Germany, and DFS which operates 74 stores across Britain, did not disclose the value of the transaction.

However, the person familiar with the deal said DFS founder Graham Kirkham will continue to have a substantial financial interest in DFS.

Advent is paying the full price in equity and hopes to bring in debt financing at a later date, the person said.

The deal is another example of buyout firms’ renewed appetite and willingness to compete for assets they view as attractive, with Advent seeing off competition from a clutch of rivals including Cinven and Permira.

The process did not run smoothly, however, with bidders complaining of scant access to company data in the early stages. Bidders were asked to come up with their own projections for company performance, people familiar with the process said.

Then Kirkham said in comments, reported a month ago by the Sunday Times, that he was “categorically not interested in selling the business.”

But despite the public statement, private equity suitors continued to pursue a deal for the Doncaster-based firm.

Advent said operating partner Richard Baker, a former chief executive of Alliance Boots, will take over as chairman from Kirkham.

It said chief operating officer Jon Massey and finance director Bill Barnes will remain with the business.

Editing by Will Waterman and Sharon Lindores