B&M enters France with Babou acquisition

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B&M France

B&M is set to have a significant presence in France after it acquired discount chain Paminvest SAS, which trades under the name Babou.

The takeover means B&M will add a network of 95 Babou stores to its portfolio.

The acquisition was made by B&M subsidiary EV Retail Ltd and the total enterprise value of the deal was €91.2 million, and included B&M’s refinancing of Babou’s debt.

The acquisition was made in cash and was financed through a loan facility.

In the year ending January 31, Babou recorded revenue of €347.1 million, EBITDA of €24.7 million and its gross assets stood at €289.4 million.

Meanwhile, pre-tax profit was just €100,0000 after goodwill amortization of €10.7 million.

Babou’s stores are predominantly located in out-of-town retail centres with an average of 27,000sq ft of retail space, while B&M’s UK average is only 19,500sq ft.

The acquisition is expected to immediately enhance earnings for B&M, but Babou’s earnings could 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,” B&M chief executive Simon Arora said.

“We are delighted that discussions with Babou over a three-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.”

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