Russian billionaire to buy Holland & Barrett for £1.8bn

Russian oligarch Mikhail Fridman’s L1 Retail is buying Holland & Barrett

An investment fund owned by Russian billionaire Mikhail Fridman has agreed to buy the UK’s biggest health foods retailer, Holland & Barrett, for £1.8bn ($2.3bn).

It is the first acquisition made by L1 Retail, which was set up last year by Fridman’s holding company LetterOne.

Holland & Barrett, which sells a range of nutritional supplements and wellness products through 1,150 stores in over a dozen countries, is owned by private equity firm Carlyle Group.

The Financial Times reported that Peter Aldis, the chief executive of Holland & Barrett, will stay on at the company after the transaction, which is expected to close by September.

Holland & Barrett had also attracted interest from Hong Kong-based AS Watson, the largest health and beauty retailer in Asia and the owner of Superdrug, Perfume Shop and Savers in the UK.

Sky News reported last week that talks between AS Watson and Carlyle Group were at an early stage and that they may not lead to a formal bid.

“They may simply be kicking the tyres, but there is some interest from them,” a source was reported as saying.

Holland & Barrett operates around 600 wholly-owned stores in the UK and employs more than 4,200 people. It also has a substantial presence in China, Hong Kong, India and the United Arab Emirates.

The retail chain was founded in the market town of Bishop’s Strotford, Hertfordshire, in 1870.

Nature’s Bounty, the owner of Holland & Barrett, was bought by Carlyle Group for $3.8bn in 2010.

Carlyle managing director Alex Stirling told FT that the health foods chain had opened more than 300 stores and expanded into new markets under the firm’s ownership over the past seven years.

L1 Retail has hired a former Goldman Sachs banker and advisers from UK retailers Argos and Home Retail Group to help it identify large European retail acquisition targets, the paper reported.