Torex sold to Cerebus for £204.4m
20/06/2007
Torex Retail Plc has announced that it has sold all of its operating subsidiaries to affiliated purchasers of Cerberus European Investments, LLC for a total consideration of £204.4m.
Draft accounts for the Torex Retail group for the year ended 31 December 2006 report revenues of £246.2m and operating profit of £4.2m against previous market expectations of £48m. Exceptional costs during the year amounted to £195.8m, resulting in a loss before tax of £191.6m.
In the four months to 30 April 2007, the group management accounts reported an operating loss of £12.7m before exceptional items.
Based on draft unaudited accounts for the group, the transaction represents a multiple of 27x 2006 pre-exceptional EBITDA.
Richard Heis and Mick McLoughlin of KPMG LLP were appointed as joint administrators of the company.
Senior debt plus deferred and transactional related liabilities at completion amount to some £212m in total. As a result, it is not anticipated that the holding company's unsecured creditors or shareholders will receive any proceeds from the administration of the holding company.
Steve Marshall, Chairman of the Holding Company, commented: "The sale of the business was the only viable option available to the board and it was achieved despite breathtaking corporate governance and financial issues at PLC level, the scale and extent of which neither I nor my board colleagues have seen in corporate life.
Against this background, huge efforts have been made to extract as much value as possible from this uniquely challenging situation. This will be of little comfort to Torex Retail's shareholders, or to the holding company's unsecured creditors, to whom no value will accrue given the numerous issues bearing down on the company.
The consideration is insufficient to fully repay the sums due in respect of the holding company's secured bank loans which include the additional £35m the board negotiated in order to provide time to conduct an orderly sale process.
However, the sale of all of Torex's operating subsidiaries to a substantial new owner is excellent news for customers, suppliers and, not least, more than 2,500 employees. With its future secured, the Torex businesses can now be properly integrated, developed and taken forward."
Mike Greenough, Chairman and Chief Executive Officer of Cerberus' acquisition vehicle for the Torex business said: "The acquisition and recapitialisation by Cerberus will deliver stability and security for Torex Retail's customers, suppliers and employees. Cerberus brings to Torex not only financial support, but also access to operational expertise to help Torex reach its long-term strategic goals.
The restructured Torex Retail will be ideally placed to build on its position as a leading independent provider of leading edge retail technology solutions to many of the world's principal retailers."
