Musgrave Group has announced that it is to sell its Budgens and Londis businesses to Booker for a total cash consideration of €57 million (£40 million) on a cash free-debt free basis.
The deal, which is subject to competition approval, would mean that Musgrave is now exiting mainland Britain, however it will still retain retail interests in Northern Ireland, the Republic, and Spain.
In the year to December 2014, Musgrave Retail Partners GB Limited had sales of £833 million, and made an operating loss before exceptional items of £7.4 million. Its Londis business posted sales of £504 million, while its Budgens operation postsd sales of £329 million.
As Musgrave chief executive Chris Martin told Checkout editor Stephen Wynne-Jones earlier today 21 May), he believes that Booker is a "good fit" for the Budgens and Londis businesses.
"Over the last 12 months we’ve been focused on turnaround, and we’ve been reducing our losses in GB, to £7 million in 2014," he said. "But the reality is that the GB market has become a lot tougher.
"Whilst we’ve been driving forward the turnaround, we concluded in re-evaluating our options that we needed to be a business of scale in GB to really compete." Musgrave's current scale in Britain is less than 0.5% of the market.
"And at that time, we got a proposal from Booker. Booker we’ve known for a long time; a very similar business to ours in supporting independent retailers. It seemed a good fit, and throughout all of this, our focus really was that we do the right thing for the retailers."
Musgrave will also develop a ‘strategic partnership’ with Booker, which could lead to collaboration on store formats.
Less than one month ago (27 April), Musgrave announced changes to its Londis leadership team, including the appointment of Des Dunbar as the retailer's new Head of Trading, and John Ridgley moving to the position of Retail Director.
Musgrave Group's full year results will be release in mid-June.
© 2015 - Checkout Magazine by Stephen Wynne-Jones