Apax’s acquisition of a 28.9 per cent stake in DIY retailer Focus Wickes has enabled Duke Street Capital to realise over £340 million from its investment while retaining a significant stake in the company. Apax paid £120 million for its interest in Focus Wickes. This values the company at £1 billion, around the same size as the IPO that was planned earlier this year. We continue to believe that Focus Wickes will capitalise on the exciting opportunities to grow its business further,” said Edmund Truell, CEO of Duke Street Capital.
Duke Street first backed Focus in 1987 when it was a chain of just six stores. In August 1998 the investor backed the £68 million acquisition of the Do It All chain from Boots. Two years later the group, known by then as Focus Do It All, made an offer for Wickes Plc and completed the deal for £325 million. In December 2000 the group also acquired the Great Mills chain from RMC Plc for £285 million. Focus Wickes is now the UK’s second largest DIY retail chain with 430 stores in the UK and sales in excess of €1.4 billion.
New debt facilities of £750 million have simultaneously been provided by ING Bank, Bank of Scotland and Goldman Sachs, these will include a revolving credit, senior term debt and a subordinated bridge to a high-yield bond. A senior debt financing of £375 million was put in place in 2001. Focus Wickes will now repay its £125 million 11 per cent senior notes due 2010, together with its £45 million 13 per cent redeemable senior notes also due 2010, via a cash offer and solicitation of consents. Bank of Scotland and ING arranged the original leveraged loan and were mandated to arrange an IPO-linked financing for the company this summer. The IPO was pulled due to poor equity market conditions.
Bill Archer, who founded the company in 1987 and is chairman and chief executive, said the new capital structure would provide additional equity to incentivise employees.