Archer sells Rebel to Super Retail Group

The acquisition will be funded through with as well as A$334 million in cash generated through an entitlement offer, Super Retail said in a filing. The new stock will be sold at A$5.34 per share, an 17.8% discount on Super Retail's October 14 closing price. According to Bloomberg, Super Retail paid about 7.9x EBITDA, compared with a median valuation of 9.4x in 18 acquisitions of Australian retailers in the last five years.

Rebel Group's retail network includes 90 Rebel Sport stores, 36 Amart stores and two Performance Sports stores. It reported A$693 million in revenue and $77 million in EBITDA for the 2011 financial year.

Super Retail wants to add 57 stores across the Rebel and Amart brands. It estimates the acquisition can deliver pre-tax synergies of A$10 million on an annualized basis, approximately half of which could be achieved in the 2012 fiscal year. The company further expects the acquisition to meet its return on capital hurdle of 20% within five years.

"The acquisition represents a fantastic opportunity for the group to leverage its retail and supply expertise in a highly complementary business and to build Rebel's position as the national leader in sporting goods retailing," Peter Birtles, Super Retail's CEO, said in a statement.

Archer paid A$369 million for Rebel Sport in March 2007, combining the company with its existing Amart Allsports business. The private equity firm was targeting a A$800 million listing for Rebel Group but admitted in October 2010 that the plan had been abandoned due to weak capital markets.

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• Topics
• Consumer
• Exits
• Australasia
• Australia
• Consumer
• Exit
• Trade sale
• Archer Capital