Apax Partners and Consortium sell Somerfield to The Co-Operative Group

Apax Partners and Consortium sell Somerfield to The Co-Operative Group

2 March 2009

London, 2nd March 2009 - A consortium including funds advised by Apax Partners, one of the world’s largest private equity firms, Barclays Capital, and R20 today announces it has completed the sale of Somerfield to The Co-Operative Group for £1.565bn. The transaction marks a successful exit for the consortium.

Founded in 1875, Somerfield is the sixth largest grocery retailer in the UK, operating out of small, local stores to serve the ‘convenience shoppers’ market. Convenience shopping is the fastest growing segment in the steadily growing grocery retail sector, and Somerfield enjoyed a 3.7pc increase in sales over Christmas and like-for-like sales growth of 5.5 per cent in the eight months to January 3 2009.

The new management team put in place by Apax and the Consortium on acquisition of the business has transformed Somerfield over the last three years. The portfolio has been reshaped to focus on convenience and local markets whilst the customer offer has been improved through range, pricing and availability enhancements.

This transformation led to Somerfield achieving a return to like-for-like growth whilst sustainably doubling profit margins.

Nearly half of the debt taken on at the time of acquisition has been paid off already with the balance being repaid on acquisition by the Co-Op and, in addition, the pension fund has had special extra contributions and guarantees of £165m during the course of the transaction.

Alex Fortescue, partner and head of the Retail and Consumer Sector at Apax Partners, commented: “This represents a good example of how private equity ownership can breathe new life into a business that is lacking strategic direction. Paul and the team have done a fabulous job in executing one of the largest and fastest restructuring programmes ever seen in grocery retailing which has put the business in great shape for the future.”

Commenting on the sale, Paul Mason, chief executive of Somerfield, added: “It’s not been easy, but I really believe that the take private of Somerfield has allowed the business to be transformed in a way that just couldn’t have happened in the public markets. I am thrilled to see the revitalised Somerfield going into such good hands.”

For further information, please contact:
Ben Harding, Tel: +44 (0)20 7872 6401, Email: ben.harding@apax.com


About Apax Partners

Apax Partners is one of the world’s leading private equity investment groups.  It operates across the United States, Europe and Asia and has more than 30 years of investing experience.  Funds under the advice and management of Apax Partners globally total over $40 billion. These Funds provide long-term equity financing to build and strengthen world-class companies.  Apax Partners Funds invest in companies across its global sectors of Tech & Telecom, Retail & Consumer, Media, Healthcare and Financial & Business Services.

About Somerfield

Somerfield, whose mission is to be ‘Britain’s favourite local grocery shop’, operates approximately 940 stores (typically under 12,000 sq ft) across the UK and employs over 40,000 staff.
Somerfield was taken private in December 2005 by a consortium consisting of Apax Partners Worldwide LLP, Barclays Capital, the Tchenguiz Family Trust, Kaupthing Bank and Management.

In the year ended 26 April 2008, Somerfield had sales of £4.2 billion and EBITDA of £233 million.

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Somerfield Plc

Former UK based supermarket chain