Permira, the European LBO giant, has announced details of an agreement with Dutch supermarket group Ahold to acquire 600 retail stores in Spain.
According to a press release, the deal is valued at approximately €685 million. The deal is subject to regulatory clearance and expected to close later this year.
It is first investment for Permira in the Spanish market since it opened an office in Madrid in April this year. Carlos Mallo, the firm’s senior executive in Spain, led the deal.
In the press statement, the firm described the deal as “the largest commitment ever made by a private equity firm in Spain.
According to a report in the Financial Times, other bidders in the auction for Ahold’s Spanish stores included Apax Partners, CVC Capital Partners and Vista Capital, a joint venture between The Royal Bank of Scotland and Santander Central Hispano.
The stores, operating under Ahold’s Spanish brands such as SuperSol, HiperSol, HiperDino, Netto and CashDiplo, generated net sales of €2 billion in 2003, Permira said. Selling the assets is part of Ahold’s route to recovery from the accounting scandal that erupted at the group last year.
Permira is currently investing the €5.1 billion Europe III fund, which it closed in late 2003. Mallo, a partner and managing director, is in charge of the firm’s dedicated Spanish team which also includes Francesco De Mojana and Jose Mugica.
Large leveraged buyouts have scarcity value in Spain, despite the fact that several international financial sponsors maintain a presence in the country. Alongside Permira, CVC and Apax, private equity firms with an office in Spain include The Carlyle Group and 3i.