FRANKFURT (Reuters) - Private equity group CVC Capital Partners [CVC.UL] is to buy perfume and cosmetics retailer Douglas from U.S. buyout firm Advent, betting on a lucrative expansion of the chain.
The German retail company had announced plans for an initial public offering last week but following an updated offer from CVC at the weekend, it said it had decided that this investment was the best option for the company.
“An IPO would have been an interesting option but only the second best for the company,” Chief Executive Henning Kreke, who will continue in his role, said on Monday. He said the founding Kreke family would remain a minority shareholder with a 15 percent stake.
The parties agreed to not disclose the purchase price. A person familiar with the matter told Reuters that it was close to 3 billion euros ($3.3 billion).
Douglas, which has around 1,700 retail outlets in Europe selling perfume, shampoo and makeup, delisted from the Frankfurt stock exchange two years ago when Advent and the Kreke family bought the loss-making chain.
Since being taken private, Douglas’s aim has been to become Europe’s biggest perfume retailer, buying French perfumery chain Nocibe and selling its confectionery stores.
Under the new ownership, the German retailer plans to expand further internationally.
“Douglas has the strength to become a global brand and we will be looking at growth opportunities outside of the European market,” Kreke said.
The acquisition does not include the book retailer Thalia and the fashion retailer AppelrathCuepper.
CVC is familiar with the sector having bought a majority stake in Denmark’s biggest health and beauty retailer Matas (MATAS.CO) in 2007 and CVC listed it in 2013.
Douglas reported sales of around 1.5 billion euros and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of around 180 million euros in the first half of its 2014/15 fiscal year.
Reporting by Kirsti Knolle; Editing by Jonathan Gould and Jane Merriman