EQT to invest in Danish retail

The investment, which will be the seventh transaction from the €4.82 bn EQT VI, follows a string of retail investments by private equity firms from the Nordic region.

The Danish firm is
recession proof, according to EQT.

EQT has agreed to acquire a 70 percent stake in Tiger, a Danish retail chain, it said in a statement. The firm will work together with the owners who will keep a 30 percent stake in the business. The transaction value was undisclosed.

The investment, which is expected to be completed in January 2013, will be made from the EQT VI €4.82 billion 2011 vintage. It will be the seventh acquisition from this fund, which is approximately 30 percent deployed, Morten Hummelmose, a partner at EQT told Private Equity International.

Tiger is a Danish retail store which was created in 1995. It sells affordable products including household products, toys, stationary and DIY-products. The chain has more than 170 stores across 16 European countries and one test shop in Japan. In the last five years, Tiger’s sales have grown more than 25 percent per year, the statement said.

Last year, the company posted sales of DKK 710 million (€95 million, $123 million) and EBITDA of DKK 110 million. The company has opened 52 stores so far this year and aims to have 195 stores by the end of 2012, according to the statement.

The company has proven to be immune to the current economic climate, according to EQT. “They have done really well during the crisis,” Hummelmose said. “We are confident Tiger is well positioned. These are relatively cheap products which do quite well in downturns. It is a good segment to be in going forward,” he added.

EQT seeks to further expand Tiger, mainly in Europe. “What’s very interesting about this company is that it works very well across borders,” Hummelmose said. “They have 60 shops in Denmark alone and if you look across the other European countries, they have only just started expanding there. So there is a significant expansion potential in Europe,” he added.

EQT is not the only Nordic firm to tap into the retail sector. In May 2012, Nordic Capital acquired a sports chain in Denmark called Sports Master and Tokmanni, a Finish discount store. In March 2012, IK Investment Partners sold Norwegian discount retailer Europris to Nordic Capital. In May 2011, Herkules Capital sold Nille, another Norwegian discount retail store, to BC Capital. 

EQT was supported by SEB Enskilda as M&A advisor, Accura acted as legal and tax advisor. KPMG acted as financial advisor.