viewB&M European Value Retail SA

B&M buys discount retailer Heron Food Group for £152mln

The company's board expects the acquisition to enhance earnings immediately

B&M store
B&M said the acquisition enables it to run a profitable discount convenience grocery brand

In more consolidation in the convenience store sector, B&M European Value Retail (LON:BME) has snapped up discount chain Heron Food for £152mln.

The consideration includes Heron's debt and a deferred cash consideration of up to £12.8mln.

B&M, which has already paid £112mln in cash, expects the acquisition to enhance earnings immediately.

READ: Late Easter and warm weather help to boost sales at discount retailer B&M

FTSE 250-listed, B&M already operates 543 stores in the UK and said the customer profiles of the two chains are similar.

Heron has 251 stores predominantly in the North of England.

In 2016, Heron recorded revenues of £274mln, underlying profits [EBITDA] of £19.1mln and profit-before-tax of £8.6mln while like-for-like revenues grew 3%. 

B&M shares were slightly higher in mid-morning trading, rising 3.9p or 1.08%  to 363.6p.

Convenience stores are a sector that is consolidating rapidly with Tesco currently in the process of buying Booker, which owns Budgens and Londis, Sainsbury’s reportedly buying Nisa and McColl’s yesterday agreeing a supply deal with Morrison’s.

Quick facts: B&M European Value Retail SA

Price: 396.2 GBX

Market: LSE
Market Cap: £3.96 billion

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