Anchorage buys Dick Smith Electronics from Woolworths

The company also plans to sell its Indian wholesale joint venture to Tata Group-owned Infiniti Retail for A$35 million, completing a full departure from the consumer electronics segment. Woolworths' and Tata's partnership dates back to 2005.

"These businesses were a small part of Woolworths and this divestment will allow us to be fully focused on the core parts of our business," Woolworths CEO Grant O'Brien said in a statement.

Dick Smith recorded sales of A$1.57 billion for the 2012 financial year and EBITDA of A$24.6 million. It has a network of 325 stores in Australia and New Zealand and employs more than 4,500 people. Woolworths took a restructuring provision of A$420 million in anticipation of the divestment.

The company as a whole had net profits of A$2.18 billion for the 2012 financial year, up 3.6% year-on-year. Once the disposal of the consumer electronics business is factored in, net profit fell 14.5% to A$1.8 billion. Retailers in Australia have endured a difficult year due to consumer cutbacks and competition from online vendors.

Anchorage typically targets underperforming businesses and turns them around before selling on to secondary or strategic buyers. The Sydney-based firm was set up in 2007 and closed its debut fund, Anchorage Capital Partners I, at A$200 million in April 2010 and is currently in the market for a new vehicle with a fundraising target of A$250 million.

In October 2011, Anchorage exited Antares Restaurant Group, which operates the Burger King franchise in New Zealand, to The Blackstone Group for a reported NZ$150 million ($125 million). It acquired the restaurant chain in 2009 for NZ$46 million, having concluded that it was a strong brand was underinvested and poorly run.

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• Topics
• Buyouts
• Australasia
• Consumer
• Consumer
• Australia
• New Zealand
• buyout
• Anchorage Capital Partners