August 7, 2017 / 4:29 PM / 2 years ago

Lion Capital picks Credit Suisse to sell Dutch retailer Hema - sources

LONDON, Aug 7 (Reuters) - Buyout firm Lion Capital is working with Credit Suisse to explore strategic options for Dutch discount retailer HEMA, sources familiar with the matter said, reviving previous efforts to find a new owner for the business.

The Swiss bank recently worked on a $884 million refinancing scheme for HEMA, which is the biggest own-brand discount retailer in the Netherlands.

It is now looking to launch a sales process which will mainly target private equity funds, one of the sources said.

Spokeswomen for HEMA, Credit Suisse and Lion Capital, which has owned HEMA since 2007, declined to comment.

HEMA opened its first store in Amsterdam in 1926 and has since expanded to Belgium, Luxembourg, Germany, Spain and Britain. But close to 80 percent of its revenue still comes from the Netherlands.

The Dutch retailer has 30,000 own brand products ranging from baby clothing to stationary, food and gardening tools, more than 700 stores in seven countries and more than 11,000 employees.

London-based Lion Capital, which has owned HEMA since 2007, had already mandated banks to offload the business in 2010 but the process failed.

After two years of losses, it returned to profit in 2016, with full-year adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 108.2 million euros, up 26.5 percent from 2015. Net sales rose to 1.2 billion euros from 1.1 billion euros.

The company’s adjusted EBITDA rose 11.4 percent to 17.6 million euros in the first quarter of 2017 compare to a year earlier.

In July, HEMA raised 750 million euros ($884 million) in two bond issues.

The first source said an initial public offering of the business could be a fall-back option if potential buyers did not appear. ($1 = 0.8485 euros) (Additional reporting by Toby Sterling in Amsterdam and Yoruk Bahceli at IFR. Editing by Jane Merriman)

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