After months of speculation, Tesco has confirmed the sale of its Dobbies Garden Centres business to an investor group led by Midlothian Capital Partners and Hattington Capital. The sale will see Tesco receive £217m in cash, which it said will be used for general corporate purposes.
Tesco bought Dobbies Garden Centres in 2007 for £150m. It is now the UK’s second largest specialist garden centre retailer behind Wyevale, operating 35 outlets across Scotland, England and Northern Ireland. The business contributed £17m to the group’s annual profits last year.
The sale is part Tesco Chief Executive Dave Lewis’ strategy to sell off non-core divisions to focus on its core UK grocery business and comes a week after deals to offload its restaurant chain Giraffe and Kipa in Turkey. Lewis said today: “It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths.”
Andrew Bracey and Barney Burgess, of Midlothian Capital Partners and Hattington Capital respectively, commented: “We are delighted to have been chosen by Tesco to take ownership of the Dobbies Garden Centres business. We’re very optimistic about the potential of the business, and we look forward to growing the business across the UK from its base in Scotland.”
- The combination of finance, private equity participation, absence of baggage and focus means renewed energy behind Dobbies
- …meaning that suppliers have opportunities – and a five year window – to propose initiatives that help deliver improved ROCE, Net Margin and Capital rotation to enable re-flotation in 2021
- Meanwhile, Tesco is receptive to anything that will drive the core business, fast…