Poundland agrees conditional deal to buy 99p Stores for £55m
If you had £55m you could walk into Poundland and fill your boots. Or, you could do what Poundland is considering and buy the 99p Store.
For that £55m, enough for 55,555,556 items from its rival, Poundland will get 99p Stores’ 251 branches, which together produce £370.4m in annual sales and serve around two million customers a week, generating an underlying Ebitda of £6.1m (all figures for the year to 1 February 2015).
The £55m will be divided into cash and share payments, with £47.5m paid in cash and £7.5m in new Poundland shares. Poundland floated last March.
Poundland aims to provide better choice, value and service for 99p Stores' customers.
Jim McCarthy, chief executive of Poundland, explained:
This is a good deal for both businesses and will benefit customers and shareholders. Through working together, Poundland will improve choice, value and service for 99p Stores' customers, bringing Poundland's proven know-how and range to 99p Stores.
We also believe that we can improve the performance of the 99p Stores estate and generate further value for Poundland's shareholders.
The deal will need to be given the green light by the UK's Competition and Markets Authority.
