TDR Capital Poised to Acquire Acqua & Sapone for €1.3 Billion

TDR Capital, a London-based private equity firm, is in exclusive talks to acquire Acqua & Sapone, an Italian discount retailer, from H.I.G. Capital in a potential €1.3 billion deal, marking a significant investment in the Italian retail market and potentially reshaping the competitive landscape." This description focuses on the primary topic of the article, which is the potential acquisition of Acqua & Sapone by TDR Capital, and highlights the main entities involved, including the two private equity firms and the Italian retailer. It also provides context on the setting, which is the Italian retail market, and mentions the significant action of the potential acquisition and its implications on the market. This description should guide the AI in generating an accurate visual representation of the article's content, such as an image featuring the logos of TDR Capital and Acqua & Sapone, or a graphic illustrating the Italian retail market landscape.

Bijay Laxmi
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TDR Capital Poised to Acquire Acqua & Sapone for €1.3 Billion

TDR Capital Poised to Acquire Acqua & Sapone for €1.3 Billion

London-based private equity firm TDR Capital is in exclusive discussions to acquire Italian discount retailer Acqua & Sapone from US investment firm H.I.G. Capital. The potential deal, which could value Acqua & Sapone at up to €1.3 billion ($1.4 billion), would see TDR Capital outbid rival firms CVC Capital Partners Plc and Clayton Dubilier & Rice in the process.

Why this matters: This acquisition would mark a significant investment in the Italian retail market, potentially reshaping the competitive landscape and influencing consumer behavior. The deal's success could also have a ripple effect on the European retail sector, encouraging further consolidation and investment.

Acqua & Sapone, a significant player in the Italian retail market since its inception in 1992 by the Barbarossa family, currently operates approximately 800 retail locations across the country. The company has been partially owned by H.I.G. Capital since 2021, with the Barbarossa family retaining a minority stake.

To facilitate the buyout, TDR Capital and other bidders have considered debt packages around €800 million. The acquisition is expected to employ a bridge-to-bond financing strategy, indicating an intention to replace the initial financing with high-yield bonds in the future.

Despite the advanced stage of the discussions, there remains a degree of uncertainty surrounding the deal. The negotiations could still encounter obstacles that might derail the acquisition process. Representatives and spokespeople for the involved parties have either declined to comment or have not been reachable, maintaining the confidentiality typical of such high-stakes negotiations.

The potential acquisition of Acqua & Sapone aligns with TDR Capital's recent moves to expand its portfolio within the retail sector. In a separate development, the London-based firm is also nearing a deal to purchase the stake of gas-station billionaire Zuber Issa in Asda, the UK supermarket chain. Furthermore, in February 2024, TDR acquired a majority stake in UK pet supplies retailer Jollyes, underscoring its ambition to strengthen its position in the retail market, both domestically and internationally.

The acquisition of Acqua & Sapone by TDR Capital, if successful, would mark a significant investment in the Italian retail market. The €1.3 billion deal would not only provide an exit opportunity for H.I.G. Capital but also position TDR Capital as a major player in the European retail landscape. As the exclusive discussions progress, the industry awaits further developments in this potentially transformative deal.

Key Takeaways

  • TDR Capital in exclusive talks to acquire Italian retailer Acqua & Sapone for up to €1.3 billion.
  • Deal would mark a significant investment in the Italian retail market, reshaping the competitive landscape.
  • Acqua & Sapone operates 800 retail locations across Italy, with H.I.G. Capital as partial owner since 2021.
  • TDR Capital considered debt packages around €800 million, with a bridge-to-bond financing strategy.
  • Deal aligns with TDR Capital's expansion plans in the retail sector, following recent moves in the UK market.