The early repayment follows better-than-expected results from Homebase which has performed ahead of budget and expectations since its acquisition last March. The positive results have also increased the possibility of an IPO for the group in the near future. A listing of the group would mark a swift and successful exit for Permira and could value Homebase at some GBP1 billion. Homebase has recently appointed investment banks Deutsche Bank, Schroder Salomon Smith Barney and UBS Warburg as advisors. A spokesperson for the group said it is still early days and the advisors have been appointed to consider all the strategic options of the group going forward.
Homebase is 70 per cent owned by Permira with J Sainsbury holding 18 per cent and management retains the remaining 12 per cent. Homebase will repay GBP65 million in mezzanine debt and a further GBP175 million of shareholder loans. Schroder Venture International Investment Trust, which also invested in Homebase will receive a GBP14 million repayment.
Permira paid J Sainsbury GBP750 million for the Homebase business. However the financing package totalled GBP1 billion, with the additional GBP250 million earmarked for transaction costs and to fund the future growth of the business. Equity was provided by Permira funds, sale and leaseback financing was provided by J Sainsbury and UBS Warburg underwrote the debt facility.