PE firms queue up for discount retailer Matalan

TPG, Blackstone, Warburg Pincus and BC Partners have all submitted bids for Matalan.

The owner of discount shop Poundland, Boston-based buy-out house Advent International, has also placed a bid. The former head of Boots, Richard Baker, who is now an operating partner with Advent, may fill the role of chief at Matalan if the firm wins the auction.

The value retailer was taken private by its founder and controlling shareholder, John Hargreaves, due to animosity with institutional investors and non-executive directors three years ago. Hargreaves, who owns 100 per cent of the company, took the chain private for £817m (€909.3m) in 2006.

According to the report, the company saw like-for-like sales rise eight per cent in the 14 weeks to June. The £1.5bn price tag is ten times earnings before interest, tax, depreciation and amortisation of £145m (€161.4m) in the year to 28 February. That EBITDA was a 6.3 per cent increase over the previous year, while sales rose two per cent to £1.04bn (€1.2bn).

Matalan has fared well in the current economic climate as consumers have gravitated towards value shopping.

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