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British retailer Currys sells Greek retail unit for $214 million

On November 3rd 2023, British electronics retailer Currys announced their divestiture of Kotsovolos, their Greek and Cypriot division, to Greece’s largest power utility company Public Power Corporation. The deal is being financially advised by Citigroup for Currys. The Public Power Corporation (PPC) was privatized recently in 2021 from the Greek government, yet Greece’s sovereign wealth fund still owns 34.12% of PPC, indicating strategic national interest in utilities operations. The $214 million deal value implies a valuation of Kotsovolos of 6x adjusted EBITDA, and shares for Currys were up by 5.4% when trading opened on Friday.


Currys announced a change in strategy following continual share price decreases (24.3% down from last year share prices) and more debt than the firm was comfortable with. Hence, the deal represents a strategic shift back to strengthening their position in Currys’ larger markets: UK, Ireland and the Nordics. After a review of Kotsovolos in June 2023, it was found that it only contributed to approximately 7 percent of total 2022 turnover and was described to have limited synergies with the rest of Currys. In fact, Currys experienced falling sales in most markets for 4 months until the end of August, yet UK trends were seen to be improving despite challenges in the Nordics. In the short term, Currys is expected to use the capital raised from the deal to strengthen their balance sheet by reducing net debt. In the future, the capital will help to reduce the pension fund’s net deficit and potentially return excess capital to shareholders.


Public Power Corporation is reputed as Greece’s largest power utility company, and the purchase of Kotsovolos proves to be of strategic significance. Kotsovolos operates 95 stores across Greece and Cyprus and around 85 percent of Greek households have purchased an electrical goods or repair product from the firm in the past 5 years, suggesting a loyal market base that can be harnessed effectively by PPC. Public Power Corporation described the deal as a “transformation move, in a market that is changing globally”, referring to the era of the energy transition. By adding Kotsovolos under their company portfolio, PPC will advance further to become a more comprehensive and “integrated provider of products and services”, through product diversification.


Analysts at Liberium described the deal to be an excellent outcome for Currys in terms of valuation. Currys’ notably weak performance over the past year reflected adeptly through their continually falling share price has warranted such a deal to take place. Looking into the future Currys’ strategic refocus onto the UK, Ireland and the Nordics paired with the capital raised from the deal should propel them in an upwards direction.


Written by: Siddh Patel

Sources: Reuters, Mergerlinks, Yahoo News


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