The purchase of Dick Smith by private equity firm Anchorage Capital and Partners Management has been finalised this morning, after the deal was struck in September last year.
The buyout completes the first phase of Dick Smith’s “turnaround initiative”, which commenced when the business was acquired from Woolworth’s last year and focuses on operational efficiency, profit margins and growth.
The company and its 325 stores were sold to Anchorage for $20 million.
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Dick Smith Australia chief executive Nick Abboud said in a statement it will be announcing new initiatives targeted at expanding Dick Smith’s footprint in the next few months.
“This is a very exciting day for Dick Smith – one that we have been working towards since Anchorage first came on board.
“The Dick Smith business is in a strong financial position with cash in the bank and no net debt. Based on Dick Smith’s performance over the last six months we are confident the business will continue to experience positive growth and performance as a major player in the Australian consumer electronics industry,” he said.
Masters losses escalate to $157 million
Supermarket giant Woolworths announced this morning further losses for its troubled home improvements joint venture Masters, updating its guidance from a loss of $119 million to $157 million.
Woolworths said its previous forecast for Masters had been “overly optimistic”, although it says it’s still on track to break even in the 2015-16 financial year.
Today’s forecast was generated assuming “moderate growth in sales per store for a start-up business, improvements in gross margin as the sales mix stabilises, efficiencies in store and increased fractionalisation of costs in the distribution and support network as sales levels increase”.
Despite the loss, Woolworths reaffirmed its commitment to the hardware business saying it remains “compelling and attractive with a substantial opportunity for growth”.
Shares flat on weak offshore leads
The Australian sharemarket has opened flat this morning, after weak leads from the United States where Federal Reserve chairman Ben Bernanke said he will start scaling back stimulus soon.
The benchmark S&P/ASX200 index was up 6.8 points or 0.1% to 4988.5 at 12.00 AEST, while in the United States the Dow Jones Industrial Average rose 18 points or 0.1% to 15,470.