Anchorage Capital Partners today announced that it has entered into an agreement with Woolworths Limited to acquire 100 per cent of Dick Smith Electronics, with the transaction expected to complete by November 2012.
Dick Smith is an iconic Australian consumer electronics retailer that was founded in 1968 by entrepreneur Dick Smith and became part of the Woolworths group in 1980. Today Dick Smith employs more than 4,500 people across 325 stores in Australia and New Zealand and in fiscal year 2012 reported sales of AU$ 1.6 billion.
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. It is Anchorage's intention to maintain the current network of 325 stores across Australia and New Zealand and to consider selective network expansion over time where appropriate.
Phillip Cave, Chairman of Anchorage commented: “Anchorage is impressed with the underlying quality of the business and sees Dick Smith as an ideal fit for our investment mandate of acquiring established businesses with strong brands that can benefit from Anchorage's proprietary approach to operational performance improvement. We're extremely pleased to have entered into the agreement with Woolworths and are confident in the long term success of the business.”
Anchorage has appointed Mr Nick Abboud as Chief Executive Officer, effective upon completion of the acquisition. The Dick Smith Board will comprise; Mr Phillip Cave as Chairman and Mr Michael Briggs, a Partner at Anchorage, together with Mr Nick Abboud and Mr Bill Wavish.
Mr Abboud, who brings 24 years' experience in the Australian retail sector, recently announced his resignation from retailing group Myer Australia, where he has worked since 1993. He was most recently Executive General Manager Operations, responsible for the overall strategic planning and direction of Myer's store operations from conceptualisation to delivery of operational strategies. His previous positions included Director of Store Operations and Director of Retail Stores. Nick began his retail career on the shopfloor and worked his way through one of Australia's largest and most respected organisations to the senior echelons of management, leveraging his detailed, hands-on understanding of all facets of retail operations.
Mr Wavish is a retail industry veteran whose prior positions include Executive Chairman of Myer, Finance Director of Woolworths and Supermarkets Director of Woolworths. Mr Wavish currently serves as Chairman of Bendon Ltd and Chairman of the Vodafone Warriors.
Nick and Bill have previously worked together at Myer, effecting significant performance improvements under private equity ownership before Myer's IPO in 2009.
Commenting on his appointment, Nick said “I am delighted to be joining this iconic Australian retailer. Dick Smith is a well regarded brand supported by an experienced team and an excellent national footprint. Anchorage and I see great potential in the Dick Smith business and I look forward to working with the team to fully realise these opportunities.”