Poundland Owner Said to Draw Buyout Firms Advent, Partners Group

(Bloomberg) --

Steinhoff International Holdings NV’s European retail unit, which runs the Pepco and Poundland discount chains, is attracting interest from buyout firms, people with knowledge of the matter said.

Advent International and Partners Group Holding AG are among private equity firms considering bids for Pepco Group, said the people, who asked not to be identified because the information is private. Steinhoff has been gauging interest from potential buyers alongside its preparations for an initial public offering, the people said.

Steinhoff is seeking to value Pepco Group at more than 4 billion euros ($4.4 billion) in any sale, two of the people said. No final decisions have been made, and there’s no certainty the buyout firms will proceed with formal offers, the people said.

Representatives for Steinhoff, Pepco Group, Advent and Partners Group declined to comment.

Steinhoff, the scandal-ridden South African retailer, said in November it’s evaluating strategic options for Pepco Group including a potential listing. The business, formerly known as Pepkor Europe, has about 2,700 stores in 14 countries.

Pepco Group is run by Andy Bond, the former chief executive officer of U.K. supermarket chain Asda. Its operations include the Pepco discount clothing and decor chain, which has a presence in eastern European markets like Poland, Romania and Bulgaria. The company also runs Poundland stores in the U.K., where most items are sold for one pound, and Dealz outlets in Ireland, Spain and Poland.

Bond said in September he expects the company’s earnings before interest, taxes, depreciation and amortization to rise about 18% in the latest financial year. Ebitda for the year ended September 2019 is estimated between 320 million euros and 330 million euros, he said.

Any transaction would add to the $249 billion of private-equity deals announced in Europe over the past year, according to data compiled by Bloomberg. Advent completed its 4 billion-pound ($5.2 billion) takeover of U.K. defense supplier Cobham Plc this month.

©2020 Bloomberg L.P.

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