Warburg Pincus sells 14% stake in Poundland for £142m

The sale of 35 million shares – priced at 405 pence apiece – leaves the GP with a 16.4% stake in the business.

Warburg initially announced it was to sell 25 million shares through the offering but increased the scale of the sell-down in response to strong demand.

The GP reaped a 4.5x money multiple and an IRR of more than 50% on Poundland's IPO in March 2014. The share price has increased significantly from the 300 pence seen at the time of flotation.

The West Midlands-based retailer is in the process of acquiring its main competitor, 99p Stores, in a deal worth £55m. The acquisition is subject to approval by competition authorities.

Previous funding
Warburg acquired Poundland in April 2010 from Advent International, in a deal thought to be worth around £200m. Lloyds provided a debt package for the acquisition.

Advent had purchased Poundland alongside GE Capital in June 2002. The deal was worth £112m, with the amount split equally between equity and debt provided by Bank of Scotland.

Company
Founded in 1990 and headquartered in Willenhall in the West Midlands, Poundland is a retailer of single-price general merchandise, with everything for sale for £1.

The company now operates around 570 stores. Under Warburg's ownership, Poundland has opened a further 250 stores and entered the Irish market with the launch of its Dealz stores, which sell the majority of products at €1.49.

Poundland generated revenues of £528.2m for the six months to September 2014, up 15% on the same period in 2013.

People
Jim McCarthy is CEO of Poundland.

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