A consortium led by Iceland Foods founder and chief executive Malcolm Walker has purchased the UK frozen food retailer.
Iceland’s management, including Walker, already owned 23% of the company and today (9 March) announced the acquisition of the rest of the business from failed Icelandic banks Landsbanki and Glitnir.
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The deal, which values the business at GBP1.45bn (US$2.28bn), will see Iceland’s management own 43% of the retailer.
Three other investors in the consortium, South African private-equity firm Brait, Dubai-based retailer The Landmark Group and UK businessman Lord Kirkham will co-own the other 57% of Iceland.
Last month, it was announced that Walker was in exclusive talks to buy stakes in Iceland owned by Landsbanki and Glitnir. The Iceland chief had pre-emption rights over the stake, which meant he could buy the retailer if, within 42 days, he matched a rival offer. At the start of February, private-equity firms BC Partners and Bain Capital made separate offers.
Iceland finance director Tarsem Dhaliwal, buying director Nigel Broadhurst and executive director for people and customers Nick Canning are the three members of management who will own shares in the retailer alongside Walker. Despite owning a minoroty of the business, the management will have operational and board control.
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By GlobalDataThe buyout is backed by an GBP860m all-senior debt package funded by Credit Suisse, Deutsche Bank, HSBC, Nomura and RBS, in addition to a GBP250m vendor loan note.
“I am utterly delighted that we have been able to conclude a deal that ensures a secure, independent future for this great British company,” Walker said. “Our new equity partners in the business are like-minded entrepreneurs who share our belief in doing the right thing in the long term interests of our people and customers.
“We all look forward to working with them to build on the outstanding success that Iceland has achieved as one of the UK’s best performing food retailers since the current senior management team returned to the company in 2005.”
Andy Pritchard, formerly managing director of Iceland, has announced his attention to retire from the company and is not participating in the buyout.
In a separate announcement, Iceland confirmed it had bought seven former Peacocks stores from the value fashion retailer’s administrator KPMG.
