Founder & current CEO of Iceland Foods Malcolm Walker has led a successful management takeover of the grocery group, with the completion of the £1.45 billion deal confirmed today.
Walker and his team, made up of Finance Director Tarsem Dhaliwal, Buying Director Nigel Broadhurst, and Executive Director for People & Customers Nick Canning, have acquired the 77 per cent shareholding held by the previous owner of the retailer, a consortium led by failed Icelandic bank Landsbanki, to take full control of the business.
The deal was backed by three new equity investors into the business; Middle Eastern retail congolmerate The Landmark Group, and South African private equity firm Brait S.A. and founder of furniture chain DFS Lord Kirkham.
After months of speculation surrounding the future of the group, with several supermarket group‘s claiming an interest in breaking-up and acquiring stores from the business, Walker has expressed how happy he is at being able to secure a stable future of the firm.
“I am utterly delighted that we have been able to conclude a deal that ensures a secure, independent future for this great British company,” Walker commented.
“It is… great news for our suppliers and our five million customers, who will continue to benefit from our commitment to bringing them continuous, genuine product innovation, outstanding value and the best service on the high street, together with our unique home delivery service.”
A debt package of £860 million, funded by Credit Suisse, Deutsche Bank, HSBC, Nomura and RBS, was used by the management team for the buyout along with a £250 million vendor loan note.
The management team now control 43 per cent of the Iceland business, with the remaining 57 per cent in the hands of the new co-investors.
Walker added: “Our new equity partners in the business are like-minded entrepreneurs who share our belief in doing the right thing in the long term interests of our people and customers.
“We all look forward to working with them to build on the outstanding success that Iceland has achieved as one of the UK‘s best performing food retailers since the current senior management team returned to the company in 2005.”
Iceland currently operates over 800 stores across the UK and employs around 22,000 staff members across its business.
Just last month votes from Iceland employees secured the retailer the coveted Sunday Times Best Company Award, and following an increase in profits all of its staff members received a 13.1 per cent pay rise last September.
Commenting on the sale, Landsbanki said: “Landsbanki‘s board of directors believes that the transaction achieves Landsbanki‘s objective of maximising the proceeds from the sale of its shares in Iceland Foods and delivering the best possible returns for the bank‘s creditors.”