GUY Hands has sought to move on from his troubled investment in EMI by agreeing a £276m deal to buy Garden Centre Group (GCG).
His Terra Firma vehicle beat competition from several private equity rivals to take the retailer off the hands of Lloyds after the bank, 41 per cent taxpayer owned, and Sir Tom Hunter’s West Coast Capital took a write-off.
Apax, CCMP Capital and Duke Street are also thought to have been interested in a deal for GCG, which has long been a target for buyout firms as Lloyds seeks to shrink the vast loan book it inherited from its takeover of Halifax Bank of Scotland.
GCG, which has 129 centres across England and Wales, operates under brands such as Wyevale, Blooms, Bridgmere and Country Homes and Gardens. It has not published performance figures for last year but City A.M. understands the price of yesterday’s deal represents a multiple of 8.5 on its earnings before interest, tax, depreciation and amortisation for 2011. A spokesman for GCG declined to comment on an estimated Ebitda of £32m.
Hands said: “The Garden Centre Group has enormous potential and we see considerable opportunity to help it grow through focussed, strategic investment. It already has a leading position in a very fragmented market with long-term growth prospects.”
A spokesman for Hunter said: “West Coast Capital wrote its stake off several years ago, we made a little bit of that back through this deal and have now exited.”
Lloyds took control of the Garden Centre Group in 2009 after a debt-for-equity swap diluted Hunter’s stake to about 20 per cent.