X5 Retail Group N.V., Russia’s largest food retailer in terms of sales, announced today that it has completed the acquisition of Paterson supermarket chain. X5 received all necessary approvals for the transaction, including approval of the Company’s Supervisory Board and an unconditional consent from the Russian Federal Anti-Monopoly Service (FAS).
In accordance with the agreement, X5 purchased 100% of the business and assets of Paterson for a price of USD 189.5 million (equity value) plus assumption of Paterson’s net debt in the amount of approximately USD 85 million.
Paterson is an excellent strategic and operational fit, which offers attractive value for X5’s shareholders. This acquisition reinforces X5’s number one position in supermarkets, providing high quality locations in key geographic markets with strong demographics for this format. X5 expects to realise significant synergies from the rebranding and operational integration of Paterson stores, with strong upside potential in sales density, profitability and cash flow generation.
The retailer plans to start the integration process in the first quarter of 2010 and finalise it by mid-year.
X5 Retail Group N.V. is Russia’s largest retailer in terms of sales. The company was created as a result of a merger between Pyaterochka (soft discounter chain) and Perekrestok (supermarket chain) on 18 May 2006. In June 2008, X5 acquired Karusel hypermarket chain and substantially strengthened its position in hypermarket format.
As on 30 September 2009, X5 had 1,217 company-managed stores located in Moscow, St. Petersburg and other regions of European Russia, Urals and Ukraine, including 952 soft discount stores, 210 supermarkets and 55 hypermarkets. X5’s franchisees operated 586 stores across Russia.
— IndiaRetailing Bureau