UK hardware chain seals MBO

A £30m management buyout of hardware retailer Robert Dyas has been finalised. It draws a line under a six month restructuring dialogue and sees Change Capital walk away from its £28m investment.

The management team of Robert Dyas, a UK-based hardware retailer formerly owned by private equity firm Change Capital Partners, has finalised a buyout of the business.

Financial details have not been disclosed, but the deal is understood to value the business at around £30 million (€33 million; $44 million).

Robert Dyas: rescued

The buyout sees chief executive Steve Round and turnaround specialist Ian Gray acquire the entirety of the business’ share capital backed by debt from the Lloyds Banking Group and Allied Irish Banks (AIB).

Lloyds and AIB originally backed the £61 million buyout of Robert Dyas by retail-focused private equity firm Change Capital in 2004. Six months ago the lending banks began discussions with Change Capital as the retailer struggled under its debt burden.

Restructuring negotiations ultimately proved fruitless and an insolvency had looked increasingly likely for the hardware chain. Last Saturday the management team responded to press reports with a statement that it was working with the banks towards a constructive solution.

Change Capital, which was founded in 2003 by former Marks & Spencer boss Luc Vandevelde, has had to walk away from its investment, writing off around £28 million.

Robert Dyas, which has 105 stores throughout the UK, is still trading profitably with like-for-like sales up by between 3 and 4 percent, said a source close to the business.