Colony Capital, Goldman Sachs and Merchant Equity Partners acquire BUT

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With the large buyout era supposedly over, it may surprise some to learn that Decomeubles Partners, a private equity firm backed by a consortium comprised of Colony Capital, Goldman Sachs and Merchant Equity Partners, has acquired BUT from Kesa Electricals. The deal values the company at EUR550m after the exchange of a sale and purchase agreement.

The deal will see Goldman Sachs and Colony each acquire 48% of the capital. The remaining 4% will be held by Merchant Equity and the management. The EUR550m purchase price is subject to adjustment for debt and other items.

Kesa Electricals, the UK distributor of electrical products which also owns France-based Darty and UK-based Comet, will use a proportion of the net proceeds to buy back shares with the possibility of bolt-on acquisitions.

The deal, which is pending shareholder approval, is expected to be finalised in March. However, the sale and purchase agreement will be terminated if the conditions are not met by 26 March. In addition, Kesa is obliged to pay a termination indemnity to the purchaser of E5.5m if the company's shareholders do not approve the disposal. The deal is comprised of 70% senior and mezzanine debt.

Founded in 1987, BUT specialises in furniture and electrical goods. The company has 112 stores and another 120 franchises around France. In 2007 BUT had a turnover of around EUR800m. It employs around 3,700 staff. (Page 33).