After a long and arduous eight-month stretch trying to prick the interests of potential buyers, Australia's top supermarket chain Woolworths Ltd was finally able to sell its Dick Smith Electronics chain for $20 million to private equity group Anchorage Capital Partners.
A total of 325 stores are involved with personnel totaling to 4,500 heads. The deal is expected to close late this year.
The divestment of the electronics business, Woolworths had said in January, was needed after a business review conducted in November 2011 found the brand was not contributing much to the company's overall return on investment.
"The businesses were a small part of Woolworths and this divestment will allow us to be fully focused on the core parts of our business," said Grant O'Brien, Woolworth's chief executive.
Woolworths acquired in 1982 the electronics chain from founder Dick Smith for $20 million, the very same amount that Anchorage tagged it to buy.
Anchorage, for its part, said that it sees no reason to reduce the number of stores from the current network, adding it might even increase it over time.
The company likewise announced that Nick Abboud would join Dick Smith as chief executive once it completes the acquisition.
"I see great potential in the Dick Smith business and I look forward to working with the team to fully realise these opportunities," Mr Abboud said, who is Myer's executive general manager for operations, overseeing strategic planning for the department store group.
Mr Abboud has been with Myer since 1993.
Founded in 1968, the electronics chain was founded by its namesake, Dick Smith, in Sydney. There were just 20 stores in the chain when it was sold to Woolworths 30 years ago.
"The transaction has been conservatively structured so that Dick Smith will emerge from the sale supported by a strong balance sheet with considerable asset backing and no core debt. As part of the purchase, Anchorage will also support the business by providing additional cash investment and guarantees," the private equity group said in a statement.
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