Tesco has reached an agreement to acquire Dobbies Garden Centres in the United Kingdom. The deal values Dobbies at GBP155.6 million (USD303 million). Tesco will initially have a 22.6 per cent holding in the company and this will eventually move up by another 2.7% stake.
Tesco CEO Sir Terry Leahy said: “This is an exciting opportunity for Tesco. Dobbies is an excellent business with a first-class management team and a great brand that we will retain and develop from its Scottish base. The brand name is strong and already well respected in the local communities in which Dobbies operates.”
In addition, as Leahy affirmed, “The deal is an important part of our strategy to provide customers with greater access to affordable energy saving and environmental products.”
“Garden centres are ideally placed to support this because for many people gardening is the way they express their desire to be green. By offering products such as water butts, composting kits and organic fertilisers, garden centres can meet this increasing demand. They can also provide a route into other carbon-efficient products like home insulation, domestic wind power, solar panels and ground source heat pumps, creating further opportunities for growth.”
Alex Hammond-Chambers, chairman of Dobbies, said: “We look forward to sharing Tesco’s wide expertise. Together we can develop our store portfolio, supply chain, systems and online business, and over time offer customers a wider range of products at keener prices.”
Dobbies is a leading garden centre operator in the United Kingdom with 21 stores, located mainly in Scotland and northern England. For the year ended October 31, 2006, Dobbies reported revenues of GBP68.8 million (USD127 million) and pre-tax profit of GBP5.4 million (USD10 million).
The addition of a specialist garden centre chain supplements Tesco’s growing non-food portfolio. The company operates a chain of non-food superstores called Homeplus.