B&M Acquires French Retailer Babou In Deal Worth EUR91 Million

LONDON (Alliance News) - B&M European Value Retail SA on Friday said it had acquired discount retailer Paminvest SAS, which operates a chain of 95 French stores trading under the name Babou.

The acquisition was made by B&M subsidiary EV Retail Ltd and the total enterprise value of the deal was EUR91.2 million, including B&M's refinancing of Babou's debt. The acquisition was made in cash and was financed through a loan facility.

In the year to January 31, Babou recorded revenue of EUR347.1 million and a pretax profit of EUR100,000 after goodwill amortization of EUR10.7 million. As at January 31 its gross assets stood at EUR289.4 million.

The acquisition is expected to immediately enhance earnings for B&M, but Babou's earnings are likely to be hurt in the short-term by a change in products as it is brought into alignment with B&M's current offering.

"B&M has made no secret of its European growth plans since its initial public offering in 2014. We are delighted that discussions with Babou over a 3 year period have led to today's transaction, which provides us with a platform for future growth in a large and attractive market whilst also providing a stable and logical new owner for Babou," said B&M Chief Executive Simon Arora.

Simultaneous to the B&M acquisition, Babou acquired its third party distribution services provider for an additional EUR2.9 million, paid by B&M. The distributor's annual pretax profit in 2017 was EUR600,000.

Shares in B&M closed down 1.1% at 385.40 pence on Friday.

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