B&m European Value Retail Plc · LSE:BME
B&m European Value Retail — Merger or Acquisition (August 2017)
6 slides from B&m European Value Retail's merger presentation, Aug 2, 2017
Slide 1: Acquisition of Heron Foods
Acquisition of Heron Foods 2 August 2017
Slide 2: UK Grocery: Heron sits in the two attractive segments
UK Grocery: Heron sits in the two attractive segments CONVENIENCE STORES Heron Foods is a Limited Assortment ‘Discount-venience’ chain, offering both Value and Convenience to shoppers. FULL RANGE SUPERMARKETS DISCOUNT 1
Slide 3: Heron gives B&M an additional discount brand to roll out
Heron gives B&M an additional discount brand to roll out • Frozen food specialist, established c.40 years ago, founded and managed by Heuck family in Hull • 251 company-operated stores averaging c.2,500 ft² of retail space, trading primarily across the North and Midlands • Located primarily in Town-
Slide 4: Strategic Rationale
Strategic Rationale WHAT IT ADDS SYNERGIES • Group gains an additional UK discount brand for roll-out • Improved buying power / scale benefit with B&M on Ambient Food • Group enters new but complementary product categories: frozen & chilled • Trial B&M’s Alcohol range and bestselling FMCG ranges int
Slide 5: Financial Profile
Financial Profile REVENUES, £M STORE #’S, END OF PERIOD 274.4 255.1 252.5 251 242 238 2014 2015 2016 2014 2015 2016 EBITDA, £M CAPEX, £M 5.1% 5.5% 6.9% 3.4% 3.0% 3.5% 19.1 8.8 9.6 13.1 13.9 7.6 2014 2015 2016 2014 2015 2016 Note: Heron’s Financial Year-End is 31st December % of Revenues 4
Slide 6: Transaction Summary
Transaction Summary Valuation 1 • Implied EV of £152m, representing 8 times EBITDA of £19m (YE 31 December 2016) • Implied Equity Price of £125m at 2 August 2017 for ‘Locked Box’ balance sheet as at 31/12/16, including maximum deferred consideration of £12.8m • Net Financial Debt of £23.2m as at 31
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