Apax and Duke Street to duck out of Focus(2)

Buyout firms Apax Partners and Duke Street Capital are reported to be making a troubled exit from Focus DIY as Apollo Management is called in for a distressed debt transaction.

Apax Partners and Duke Street Capital have put Focus DIY up for sale and rival buyout firm Apollo Management is reported to be leading the bidding.

The UK newspaper Financial Times reported Apollo is in late stage talks to takeover Focus DIY to carry out a reconstruction to avoid bankruptcy for the struggling home improvement firm.

Apax and Duke Street Capital will probably fail to make any money on the sale, although it has been a profitable investment for Duke Street over the years since it first invested in 1987. Today’s price tag is thought to be considerably below the company’s £280 million debt level.

Focus was significantly affected by the decline in the DIY market in 2005 and as it was highly leveraged its problems were exacerbated.

The FT reports Duke Street Capital has 43 percent while Apax has 33 percent of shares in Apax. The company’s founder Bill Archer owns 11.5 percent.

Duke Street Capital first invested in Focus in 1987 when it had just six outlets and has built the business with a series of acquisitions including retailer Wickes, acquired in 2000 and sold to Travis Perkins in a £950 million transaction in December 2004.

It sold a 29 percent stake in Focus, which now has more than 250 stores, to Apax Partners in 2002 for £120 million shortly after shelving plans for a flotation of the business.

Duke Street Capital was not immediately available for comment.