Australian retail group Wesfarmers Limited has entered into an agreement to acquire Homebase - the second-largest home improvement and garden retailer in the UK and Ireland - from Home Retail Group for £340 million. The Homebase name will disappear from UK high streets, to be replaced by Wesfarmers' Bunnings brand.
Headquartered in Milton Keynes, Homebase currently has 265 UK stores with a national distribution centre in Swindon, and a further three DCs run by 3rd party providers at Cowley, Park Farm and Octavian Park in Wellingborough.
Home Retail Group chairman John Coombe said: "We are very pleased to have reached agreement with Wesfarmers regarding the sale of Homebase. We believe that this is the best deal for shareholders and for the business."
Wesfarmers managing director Richard Goyder said: “The £38 billion UK home improvement and garden market is a large and growing market with strong fundamentals. The opportunity to enter this attractive market through the acquisition of Homebase has been comprehensively researched and carefully considered. Detailed due diligence has been completed and implementation and improvement planning is well advanced.”
Bunnings managing director John Gillam said the acquisition represents a compelling opportunity to enter the attractive UK home improvement and garden market: “Homebase has an established and scalable store platform with strong representation in high density areas. The stores are well-sized for the UK market and support warehouse merchandising and a low-cost operating model.
“The acquisition is the first step in building a further growth platform for Bunnings with additional planned investment of approximately £500 million in the Homebase team and assets to build a new Bunnings-branded business over three to five years. We will combine essential local elements with the best of Bunnings to bring customers in the UK and Ireland an exciting new home improvement and garden
Following completion, the management structure at Bunnings will see Peter (PJ) Davis appointed as managing director and Rodney Boys as finance director.
Davis has over 35 years’ experience in the hardware and home improvement industry. He has held a range of senior roles in operations, marketing, merchandising and property. He has been instrumental in the growth and development of Bunnings, including leading the team responsible for the inception of the Bunnings Warehouse format. Since 2004 he has held the role of chief operating officer.
Boys has over 20 years’ experience working in a variety of senior roles within Wesfarmers group companies. He joined Bunnings in 2003 and led significant change in the IT area before taking on senior roles in logistics, finance and business support functions. Most recently he has held the role of chief financial officer.
The transaction is expected to be completed by the end of the first quarter of calendar year 2016.