11-Oct-2012 11:52 AM

Dufry acquires majority stake in Folli Follie Group

Dufry signed (10-Oct-2012) an agreement to acquire 51% of the travel retail business of Folli Follie Group. The business is the leading travel retailer in Greece with 111 shops, more than 18,000sqm of retail space and "an attractive concession portfolio with long duration". The acquisition is consistent with Dufry’s growth strategy focused on emerging markets and tourist destinations and will strengthen its position in the Mediterranean region. Details include:

  • Acquisition details: Dufry will acquire a 51% shareholding in the target business for EUR200.5 million. Dufry plans to finance the consideration for the 51% stake, as well as shareholder structuring of EUR28 million and transaction costs through an equity increase of approximately EUR250 million by issuing shares from existing authorised capital. Dufry has the option to acquire the remaining 49% in four years time at fair market value;
  • Integration: Dufry will integrate the business into its existing operations and expects to generate significant synergies through increasing spend per passenger, gross margin improvements and reorganisation of back-office functions. Overall, Dufry estimates annual synergies to reach around EUR10 million within 18 months of closing. These synergies are to be delivered mainly through procurement improvements, as the target business benefits from Dufry’s global procurement platform. Additional synergies are also expected to come from higher spend per passenger and logistics and back office integration;
  • Folli Follie portfolio: Folli Follie Group’s travel retail business is the leading travel retailer in Greece operating 111 duty free and duty paid shops with more than 18,000sqm of retail space in 46 locations throughout the country in airports, seaports and border shops. The business holds an concession portfolio to operate duty free shops in the whole of Greece until 2048.
  • Folli Follie Group financials: In 2011, the business generated turnover of EUR291 million, of which more than 80% came from international customers. EBITDA in 2011 was EUR84 million, with an EBITDA margin of 29.0%. Folli Follie Group will carve-out its travel retail business, which will enter a new local non-recourse bank facility of EUR335 million;
  • Dufry portfolio: Currently present in several locations in Southern Europe and Northern Africa, Dufry will operate the business through its Region EMEA & Asia;
  • Next steps: Folli Follie Group will immediately start the carve-out of its travel retail business, which involves a series of legal steps and requires various approvals. The transaction is expected to close after completion of this carve-out process and obtaining all relevant approvals, including governmental consents and the approval of Folli Follie Group shareholders, which based on current information is expected to be early next year. Dufry plans to execute the equity increase using existing authorised capital. [more - original PR] [more - original PR - Dufry II] [more - original Pr - Folli Follie Group]

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