From Tesco to tiles: The eight largest mergers and acquisitions of 2023

This year has seen a large number of M&A deals in the retail industry. In fact, the number of UK retail merger and acquisition deals increased by 23% in the last year, a five year high, according to data from law firm RPC. With more and more retailers looking for outward investment or needing to be rescued from the brink of administration due to the prolonged impact of the cost of living crisis. Here are the eight largest mergers and acquisitions deals sealed so far this year. Tesco and Paperchase The year started with an interesting acquisition as Tesco acquired stationary store Paperchase’s intellectual property in a pre-pack deal. Interestingly Tesco decided not to purchase any of the Paperchase stores. In the end Paperchase was unable to find a buyer for its stores and 820 members of staff lost their jobs. Paperchase was put up for sale just months after it had been acquired by Steve Curtis, an operating partner at Rcapital, as a private investor for an undisclosed sum. Since the deal was completed Tesco has opened a number of Paperchase kiosks in its stores which have allowed the company to further diversify its brand. Asda and EG Group The largest acquisition of this year so far was Asda’s acquisition of the EG Group for £2.27bn. As a result of the deal Asda took control of 350 petrol stations and more than 1,000 food-to-go locations. The interesting part of this deal is the fact that both EG Group and Asda are owned by Zuber and Mohsin Issa and the private equity group TDR Capital. Asda stated that this deal will allow it to “better serve a combined base of around 21m customers each week, as well as leveraging Asda’s growing loyalty scheme and bringing together convenience, fuel, GM, grocery, foodservice and omni-channel retailing – under Asda’s heritage in value and ‘customer first’ retail”. Woolovers and Hotter Shoes The most recent entry into our list is Woolovers acquisition of Hotter Shoes from Unbound Group. Woolovers saved Hotter Shoes from administration after Hotter was searching for £2m to avoid administration in July. According to Hotter Shoes, the company had been “adversely affected by difficult trading conditions in the retail environment, and despite taking steps to address costs across the business, creditor pressure continued to increase”. As part of the sale, all 421 employees and 27 stores and concessions have transferred across to Woolovers. ABG and Hunter Boots Another footwear related acquisition came in the form of Authentic Brands Group’s acquisition of the famous Hunter Boots brand. ABG acquired the IP of Hunter Boots for an undisclosed fee. ABG intends to use the IP through a licensing model through the Authentic Brands’ platform and plans to expand the Hunter brand in Canada, Latin America, Europe, the Middle East, Africa and other markets across the Asia-Pacific region. Bioren Limited and Planet Organic The biggest auction of the year came in the race to acquire organic supermarket Planet Organic. Established companies such as Sainsbury’s and Holland and Barrett were all in the mix for the company until it was eventually bought by an investor group Bioren Limited involving the founders of the company Renée and Brian Elliott. As a result 10 Planet Organic stores were saved in locations throughout London, safeguarding 194 jobs in-store and 71 jobs in the retailer’s head office. However, four stores were not included in the transaction and closed with a total of 64 redundancies. Joint administrators, Will Wright and Christ Pole, from Interpath Advisory were appointed immediately following the deal. Holland and Barrett and Avie Not content with missing out on Planet Organic, Holland and Barrett took the chance to diversify its business by acquiring fit-tech startup Avie for an undisclosed sum. Holland and Barrett had been looking to expand its reach beyond retail, Charlie Leggate and Kit Logan co-founded Avie and both men join the H&B Wellness Futures Team to build Avie’s technology into Holland & Barrett’s digital services and solutions. Stiled Holdings, CTD Tiles and Tile Giant Another interesting acquisition saw Tile Giant acquired out of administration by Stiled Holdings and CTD Tiles who both bought separate sections of the business. Stiled Holdings, which is lead by the former Topps Tiles CEO Matt Williams, purchased the trading name, goodwill and the business and assets, including the transfer of employees at 56 stores and head office. CTD Tiles bought the business and assets, including the transfer of employees at 13 stores which has resulted in continued employment for 48 staff. Some 13 stores were not included as part of either transaction and were closed with immediate effect leading to 43 members of staff being made redundant. The company was acquired in January 2023, following which the new management team undertook a review of the business which found that there was a greater funding requirement than had been initially anticipated. In addition, the level of creditor pressure experienced by the company was increasing, with a number of creditors beginning to take action in relation to unpaid arrears. Frasers and five JD brands A regular player in acquisitions, Frasers Group purchased five brands from JD Sports for £47.5m. The Tessuti, Scotts, Choice, Giulio and Cricket brands were sold to Frasers under terms which were agreed back in 2022 as JD looked to divest a number of brands. JD Sports said in December that the divestment of the businesses will allow the group to “focus more fully” on the opportunities across the rest of the group, in particular its international and digital expansion of its core premium sports fashion fascias. As a result of this transaction Frasers decided not to proceed with its acquisition of the Rascal Brand from JD for reasons that were not made clear.

From Tesco to tiles: The eight largest mergers and acquisitions of 2023

With retail mergers and acquisitions up 23% in the last year Retail Sector looks at the largest deals in 2023 so far

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