Carlyle Reaps £1.8B Bounty In Latest Retail Sale

Earlier this year, reports emerged that The Carlyle Group was seeking a shake-up of some sort at The Nature’s Bounty, a British health-and-wellness business backed by the buyout giant for the past seven years. Whether that would take the form of a major divestiture or a wholesale exit was unclear at the time.

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No longer: Carlyle has agreed to sell Holland & Barrett, a subsidiary of Nature’s Bounty that operates more than 1,000 health-food shops around the world, to L1 Retail for £1.77 billion. L1 is controlled by billionaire Mikhail Fridman, a backer of Uber and a number of large businesses in Russia. In the wake of Amazon’s takeover of Whole Foods, his investment in Holland & Barrett marks a second major bet on health-focused grocery stores in the past fortnight.

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Carlyle will retain its stake in Nature’s Bounty, which it bought for some $4 billion in 2010, but the deal will mark an exit from Holland & Barrett—the sort of event that’s become increasingly common in private equity. As companies in the retail space continue to go bankrupt, PE firms are becoming more proactive about vacating the space.

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Between North America and Europe, the frequency of PE-backed exits from retail companies has nearly doubled in the past dozen years, according to the PitchBook Platform, growing from 45 in 2006 to 83 each of the past two years. So far this year, bankruptcies have made up nearly 38% of all PE exits in the space, the largest proportion since at least 2006.

As a retail exit, the deal is part of one growing trend; as a sale by Carlyle, it’s in opposition to a different one. After completing 55 exits during 2016, per PitchBook data, the New York-based firm has logged a mere 10 thus far this year—on pace for Carlyle’s lowest figure since 2009.

Here’s a full look at the firm’s recent exit history:

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PitchBook subscribers can check out much more info on PE exits in retail and Carlyle’s exit activity.

Article by Kevin Dowd, PitchBook