Russian billionaire buys Holland & Barrett for healthy €2.0bn

pic: Holland & Barrett

US private equity firm Carlyle sells Europe’s largest health and wellness retailer to investment fund controlled by Mikhail Fridman

Carlyle expect to complete the sale to L1 Retail fund in September, bringing to an end their seven-year ownership of Holland & Barrett.

The private equity firm acquired the health food retailer as part of its €3.4bn (£3bn) purchase of Nature’s Bounty – the US group now known as NBTY. Carlyle is looking to sell the remainder of NBTY, which includes MET-Rx, Pure Protein and Sundown Naturals among its brands.

"We are delighted to now be in partnership with the L1 Retail team and its advisory board of internationally-renowned retailers," commented Holland & Barrett CEO Pete Aldis, who will stay on after the transfer of ownership.

The advisory board includes Karl-Heinz Holland, former chief executive at Lidl Group, John Walden who was chief executive of Home Retail Group and dunnhumby founder Clive Humby.    

Billionaire Russian oligarch Mikhail Fridman, who set up the investment fund in late 2016, aims to invest in retail businesses that it believes can be market leaders.

Holland & Barrett is L1 Retail’s first acquisition. The fund strongly believes in the further growth potential of the chain, which has enjoyed 32 consecutive quarters of sales increases and a 2016 annual revenue of €690m (£610m).

“Holland & Barrett is a clear market leader in the UK health and wellness retail market, with attractive growth positions in other European and international markets,” said L1 Retail managing partner Stephan DuCharme.

"We believe that the company is well positioned to benefit from structural growth in the growing €13bn (£10bn) health and wellness market and has multiple levers for long-term growth and value creation," he added.

Nevertheless, some remain cautious about the purchase. Independent retail analyst Richard Hyman believes that L1 Retail are paying an “extraordinarily generous price.”

He also emphasises the need to create a retail experience that will justify in-store footfall to compete against online giants such as Amazon. 

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