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LONDON – Holland & Barrett, Britain’s biggest chain of health food shops is to be bought by L1 Capital, a fund headed up by Russian oil billionaire Mikhail Fridman.
L1 Capital will pay £1.8 billion ($2.3 billion) to acquire Holland & Barrett from US private equity powerhouse Carlyle, which has owned the retailer since 2010. Carlyle bought Holland & Barrett during the takeover of US firm Nature’s Bounty for $3.8 billion.
L1’s purchase of the chain – which has around 1,150 shops globally – marks its first acquisition since being launched at the tail end of 2016 by Fridman’s holding company LetterOne. It was created to invest around $3 billion across the retail sector, looking for companies that are “moving with and leading long-term trends.”
“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,” Stephan DuCharme, L1’s Retail managing partner said in a statement.
“We believe that the company is well positioned to benefit from structural growth in the growing £10bn health and wellness market and has multiple levers for long-term growth and value creation.”
Holland & Barrett’s current CEO is expected to stay in his role. Peter Aldis said in a statement: “We are delighted to now be in partnership with the L1 Retail team and its advisory board of internationally-renowned retailers.”
According to a report in the Financial Times, L1 faced competition in its purchase, with US giant KKR, private equity firm Sycamore Partners and Hong Kong’s AS Watson, which owns UK health and beauty retailer Superdrug, all thought to be interested in the retailer.
Fridman, who is behind L1 Retail, is best known in the UK for his time as the chief executive of oil firm TNK between 2003 and 2012. TNK was part of a joint venture with British oil and gas giant BP. It was sold to Russia’s state oil company, Rosneft, for around $56bn in 2012.