Proposed Transaction Includes Strategic Partnership with One of Europe’s Top 3 Furniture Retailers
LONDON, June 29, 2016
In the latest of a series of partnership transactions since 2009, Clayton, Dubilier & Rice (“CD&R”) today announced that it has entered into exclusive discussions under which CD&R-managed funds would acquire BUT, the largest furniture retailer network in France, in a 50:50 partnership with WM Holding, a company related to the XXXLutz Group, one of Europe’s three largest furniture retailers.
Subject to the information and consultation process with the competent workers’ council and customary regulatory approvals, the transaction would be expected to close in the second half of 2016. If completed, it is expected that Sir Terry Leahy, Senior Advisor to CD&R funds and former CEO of Tesco plc, would assume a senior role which could include the role of Chairman of the Board.
“CD&R’s reputation as a trusted partner with capabilities to successfully manage complex transactions has produced a number of compelling investment opportunities for the Firm in recent years,” said CD&R Partner David Novak. “Our proposed investment in BUT fits into this pattern perfectly and is consistent with our European investment strategy. We look forward to entering into a strategic partnership with XXXLutz to bring fresh operational and strategic insight, and synergies to take the company to the next level of profitable growth.”
More than half of the investments completed by CD&R since 2009 have been highly distinctive “partnership” transactions in which a corporate or strategic partner selects CD&R to invest and help create value in a business it owns or is acquiring.
BUT is one of the leading home equipment retailers in France, operating through a network of 303 company and franchisee-owned stores. The company offers a comprehensive selection of furniture, appliances and decorative accessories, as well as a range of electronics, all complemented by attractive financing and extended warranty service offerings. In 2015, BUT generated net revenue of €1.3 billion.
“BUT has all the characteristics of a CD&R retail investment. It is a leader in a stable market, focused on value and convenience with a track record of consistent growth and commitment to operational excellence, which makes the company a great potential fit for us,” said CD&R Partner Marco Herbst. “We look forward to working closely with BUT’s exceptional management team and leveraging the expertise of our strategic partner to position BUT for even greater success in the future.”
“We support the project presented by this consortium composed of a leading PE player and a leading European retailer. We believe that this partnership would help accelerate the Company’s growth and help its employees to prosper in the future,” said Frank Maassen, CEO of BUT. “We look forward to working with them as we continue to deliver the quality, value, convenience and selection that our customers have come to expect.”
M&A advice was provided by Bank of America Merrill Lynch, BNP Paribas, Lazard and M&M Capital Ltd, legal advice by Clifford Chance and Debevoise & Plimpton LLP, and due diligence support by Ernst & Young and Roland Berger.
Founded in 1972, BUT has grown to become the home equipment retailer with the largest store network in France, offering a comprehensive selection of furniture, decoration and appliances. With more than 6,000 employees, the company maintains the third largest position in terms of market share in the country. BUT’s 303 stores include 186 that are directly owned and 117 that are franchised.
About Clayton, Dubilier & Rice
Founded in 1978, Clayton, Dubilier & Rice is a private investment firm with a strategy predicated on producing financial returns by building stronger, more profitable businesses. Since inception, CD&R has managed the investment of $21 billion in 66 businesses representing a broad range of industries with an aggregate transaction value of approximately $100 billion. The Firm has invested in value-oriented European retail businesses, including B&M European Value Retail and Motor Fuel Group. The Firm has also invested in market-leading French businesses, including SPIE and Rexel. The Firm has offices in New York and London.
XXXLutz is one of the three largest furniture retailers in Europe offering a wide range of furniture and decoration across 236 stores in Austria, Germany and Eastern Europe. XXXLutz employs over 20,000 staff.