PPM backs TJ Hughes MBO

PPM Ventures has backed the £56m buyout of the UK discount department store chain from JJB Sports.

Mid-market private equity firm PPM Ventures has acquired TJ Hughes, the UK’s discount department store operator, from JJB Sports Plc. The transaction values the business at £56m, including the refinancing of external debt.

 

The Liverpool-headquartered business is being sold by JJB Sports, which paid £42.9m to acquire the business in April 2002. TJ Hughes operates 37 stores in the UK. The financing of the deal has been structured to allow management to acquire a 15 per cent stake in the business. Bank of Scotland Corporate Banking provided the debt financing for the transaction.

 

For the year to 31st January 2003, the business reported sales of £208m and profits of £6.4m. The auction of the business was coordinated by investment bank Rothschild on behalf of JJB, before PPM was offered exclusivity. PPM was introduced to the deal by Deloitte & Touche.

 

“With the experience and resources of PPM behind it, TJ Hughes will be able to exploit its unique position in the retail landscape,” said Gareth Whiley, director at PPM Ventures. “The concept of quality discount retailing is set for significant growth, and TJ Hughes is best placed to benefit from this, with no direct competitor in the UK and a highly capable management team.”

 

PPM invests in mid-market transactions in the leisure, retail, business services, financial services and healthcare sectors. Earlier this week, the firm announced the sale of portfolio company Oasis, reporting that it had more than tripled its original £30m investment in the UK fashion retailer via a £152m sale to Iceland headquartered retailing group Baugur.