Dutch high street staple Hema will be acquired by Core Equity, a Belgian investment group for about €1bn including debt, the Financieele Dagblad said on Wednesday, citing reliable sources.
The sale of Hema by long-term owner London-based Lion Capital appeared to have stranded earlier this year. There were only two bidders and neither could reach agreement with Lion which has owned Hema for 10 years.
New candidate Core Equity was formed in 2017 mainly by former executives from US-based Bain Capital and Hema will be Core Equity’s second purchase. Like Bain itself, Core Equity targets companies in need of major restructuring, a source told the FD.
Lion Capital acquired Hema 10 years ago for €1.1bn and put it up for sale earlier this year after saddling Hema with debt. The Amsterdam-based group paid more than €54m in interest charges in 2016, compared to just €500,000 in 2016.
The sharply higher financing fees were due to debt refinancing including early redemption of high-priced bonds. As a result, net debt for the group rose to €868m from €624m in 2016.
Amsterdam-based Hema booked 2017 net profit of €6m on turnover of €1.2bn, reporting higher sales in all countries and across all major product categories.
The group’s expansion has mostly been abroad where its 200 outlets are bigger than in the Netherlands and have separate departments focusing on beauty and cooking.
A total of 25 new stores were opened last year, 20 of them in France, three in Spain, one in Belgium and one in Germany. Sales in France totalled €109m equaling those in Belgium and Luxembourg, where the company has been active much longer.
Hema operates more than 700 stores in nine countries in two continents and has more than 11,000 employees.
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