Tesco has morning confirmed the sale of its Dobbies Garden Centres business to an investor group led by Midlothian Capital Partners and Hattington Capital.
The sale represents the entire share capital of Dobbies Garden Centres Ltd. Tesco will receive £217m in cash, which will be used for general corporate purposes.
Tescos announcement on the Tesco plc website states: Tesco bought Dobbies Garden Centres in 2007, and since then it has grown to become the UK’s second largest specialist garden centre retailer, operating 35 garden centres across Scotland, England and Northern Ireland.
Tesco Chief Executive Dave Lewis said:
“Through their hard work and dedication to customer service, Dobbies colleagues have built a great business, and I would like to thank them for everything they have done. It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths.”
Andrew Bracey and Barney Burgess, of Midlothian Capital Partners and Hattington Capital respectively, said:
“We are delighted to have been chosen by Tesco to take ownership of the Dobbies Garden Centres business. It is a great business with fantastic colleagues. We’re very optimistic about the potential of the business, and we look forward to growing the business across the UK from its base in Scotland.”
On the Hattington Capital website the following statement gives more details about the aquisistion and the new Dobbies Board of Directors:
"The group that has acquired Dobbies will invest to secure the long-term growth of the business. It has committed to protect jobs, keep the head office in Scotland and grow the business throughout the UK from its base in Lasswade.
The group has been brought together by Midlothian Capital and Hattington Capital, and includes a number of highly experienced retail industry investors.
Commenting on the deal, Andrew Bracey of Midlothian Capital said: “Dobbies is an iconic brand and we believe that Dobbies can be the market leader in the garden centre sector. It has a superior team that, with our long-term vision and capital, will grow this business across Britain.”
“Together we have committed capital and expertise to drive the future growth of Dobbies. All of us are passionate about the custodianship of this business: Dobbies has found a good home with our group.”
He added: “We have been treated very professionally by Tesco and its advisory team.”
Barney Burgess, of Hattington Capital, explained: “We are delighted to have been chosen by Tesco to become the new owners of Dobbies. We inherit a strong company with some of the best stores in the industry and fantastic colleagues who, together with Tesco, have been good stewards of the Dobbies brand.”
He added: “The prospects for Dobbies are excellent: it has significant potential for growth in an under-served and under-developed sector. This is one of the most exciting opportunities in British retail.”
Mr. Bracey will be joined by Aidan Clegg and Neil Currie of Midlothian Capital, as well as Mr. Burgess and Frederick Goltz of Hattington Capital on the Dobbies Board. The acquisition has received financing from Ares Capital Partners.
The acquiring group was advised by Rothschild and Slaughter and May."
Tesco plc who bought Dobbies for £155m in 2007 when Sir Terry Leahy was CEO, will continue to offer customers a wide selection of Home and Garden products through its own stores and online.
Gross assets relating to Dobbies Garden Centres Ltd. included in the Tesco PLC accounts as at 27 February 2016 were £255m.
Dobbies Garden Centres Ltd. made a contribution of £17m to Tesco PLC’s reported profit before tax for the year ended 27 February 2016.
