Guy's Green Hands

Having spent the best part of the last five years arguing over his ill-fated acquisition of EMI Music Group in 2007, Guy Hands and his buy-out firm Terra Firma are very close to concluding their acquisition of the Garden Centre Group, according to sources.

To you and me, the Garden Centre Group may be more familiar via its trading names of Wyevale and Blooms, and has itself had a fairly torrid time in terms of ownership as a result of the credit crisis. Formerly trading as the quoted Wyevale Group, the company was delisted as a result of a private equity-backed buyout in June 2006, where West Coast Capital, an investment vehicle set up by Sir Tom Hunter, paid just over £220m for the business.  The Bank of Scotland ended up taking 26% of the business in December 2008 in a debt-for-equity swap as credit tightened and the company’s debts became an issue.

And now Mr Hands  and Terra Firma are reportedly paying £300m for the business, which remains the UK’s biggest garden centre group and employs over 5,000 staff. This investment would be only the second in the last couple of years for Terra Firma, whose most recent investment prior to this deal was the acquisition of the Italian photovoltaic energy producer Rete Rinnovabile which happened back in November 2010. 

As demographics show, the UK population is an ageing one, and it is today’s pensioners that will have the highest disposable income to spend relative to the next few generations of pensioners. Garden centres are popular with retirees, and as the cost of living is rising so there is an increased number of people who are becoming more interested in growing their own food. Likewise, energy is becoming more expensive and solar power has for some time been the focus of an alternative form of energy, thus one has to think that Terra Firma are now looking at investments that are much more closely aligned with more general trends. 
 

Filed under: retail, UK, PE