Total transaction valued at up to $110M (AUD) and expected to close next week
ANN ARBOR, Mich., June 5 /PRNewswire-FirstCall/ -- Borders Group, Inc.
(NYSE: BGP) today announced that it will sell 100 percent of its Australia/New
Zealand/Singapore businesses -- which includes 30 Borders superstores -- to
A&R Whitcoulls (ARW), the leading Australasian retailer of books and related
products owned by private equity firm Pacific Equity Partners (PEP). The
total transaction is valued at up to $110 million and is expected to close
(Logo: http://www.newscom.com/cgi-bin/prnh/20060208/BORDERSGRPLOGO )
Upon closing of the transaction, Borders Group will receive proceeds of
approximately $95 million (AUD) or approximately $90 million (USD based on
current exchange rates). Additional deferred payments of up to $15 million
(AUD) or approximately $14 million (USD based on current exchange rates) will
be paid to Borders Group on or about March 31, 2009 if certain performance
targets are achieved.
As part of the agreement, ARW, which owns and operates over 260 stores
including Australia's oldest bookstore chain, Angus & Robertson, as well as
popular New Zealand book, magazine and DVD retailer Whitcoulls, among other
holdings, will have the right to use the Borders brand throughout
Australia/New Zealand/Singapore consistent with a brand licensing pact that is
part of the agreement.
"These businesses have performed well led by a talented management team
who has consistently delivered strong execution in Borders superstores in
Australia, New Zealand and Singapore," said Borders Group Chief Executive
Officer George Jones. "This transaction represents an attractive valuation,
permits us to forgo further investment in these businesses, and provides our
company with a significant cash infusion to further reduce debt, which is one
of our key financial initiatives. ARW is a well respected and highly
successful retail company with outstanding leadership that will be
strengthened with the addition of the local Borders executive team and our
stores. We trust A&R Whitcoulls to successfully manage the Borders brand."
A&R Whitcoulls Group Managing Director, Ian Draper, said that the Borders
assets are complementary to his company's existing holdings, offering a
different yet enhanced shopping experience to Angus & Robertson in Australia
and Whitcoulls in New Zealand. "Borders will bring a new dimension to our
retail offerings," he said. "The customer-experience based model invites
shoppers to browse with a vast range of books, music, movies and cafes in
Borders stores. This model has proven popular in the local market and will
complement our existing presence by targeting a different demographic through
the premium format and vast selection of products."
Managing Director of Borders Asia Pacific, John Campradt, will continue to
serve in his current role managing the Borders business. "Building the
Borders brand throughout Australia, New Zealand and Singapore has been
fulfilling," he said. "Now, we enter an exciting new chapter as part of ARW,
which has welcomed our management team, our stores, and our people, and will
provide the support we need to drive profitable growth."
About Borders Group
Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE: BGP) is a
leading global retailer of books, music and movies. Through its subsidiaries,
Borders Group employs approximately 30,000 people and operates over 1,100
stores worldwide, as well as the newly launched Borders.com. More information
on the company is available at www.borders.com .
About A&R Whitcoulls
A&R Whitcoulls is a leading book and stationery retailer in Australia and
New Zealand. A&R Whitcoulls currently operates four divisions:
- Whitcoulls - A nationwide book and stationery chain with the largest
share of the New Zealand market. Within the Whitcoulls division,
Bennetts Tertiary sells textbooks and related course materials to
students and other campus users.
- Calendar Club - A chain of specialty calendar stores which operate
over the Christmas period (October to January) in major shopping
centers and other key retail precincts in both Australia and New
- Angus & Robertson - A nationwide bookstore chain with the largest
market share in Australia.
- Supanews - A joint venture business that operates newsagencies in
The Whitcoulls and Angus & Robertson brands are well known and established
in their respective markets and have histories dating back over 100 years.
Pacific Equity Partners acquired the Group from the UK retailer, WH Smith, in
PEP is the most active private equity fund in Australia and New Zealand,
providing strategic management experience and capital resources to grow
companies in a range of business situations. PEP Fund IV is the largest
private equity fund in Australia and the firm has over $6.0 billion of equity
funds under management. Since its establishment in 1998, PEP has made 18
portfolio company acquisitions and more than 20 add-on acquisitions at the
PEP currently has 13 companies in its portfolio with combined revenues in
excess of $3 billion per annum, spanning industries including food, liquor,
technology, financial record-keeping and retail trade. Recent PEP investments
- American Stock Transfer & Trust (AST) - The largest independent share
registry in the US by issuer number.
- Hoyts Group - A leading cinema exhibitor and advertiser in Australia
and New Zealand.
- Veda Advantage - The leading provider of business and financial
intelligence services through the use of financial record-keeping,
analytics and technology.
- Independent Liquor - A leading manufacturer and distributor of
alcoholic beverages in Australia and New Zealand, with a particular
focus in the ready-to-drink (RTD) category.
- Australian Administration Services (AAS) - A provider of administration
services to the superannuation and retail master trust industries. AAS
has been merged with Link Market Services, a share registrar and
analytic business also owned by PEP.
Detailed information about PEP's entire portfolio and its exited
investments can be found at www.pep.com.au .
Borders Group Safe Harbor Statement
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. One can identify these
forward-looking statements by the use of words such as "projects," "expected,"
"estimated," "look toward," "going forward," "continuing," "planning,"
"returning," "guidance," "goal," "will," "may," "intend," "anticipates," and
other words of similar meaning. One can also identify them by the fact that
they do not relate strictly to historical or current facts. These statements
are likely to address matters such as the company's future financial
performance (including earnings per share, EBIT margins and inventory turns,
liquidity, same-store sales, cost reduction initiatives, and anticipated
capital expenditures and depreciation and amortization amounts), its
exploration of strategic alternatives, its financing agreement with Pershing
Square and the benefits thereof, the closing of the sale of the company's
Australia/New Zealand/Singapore subsidiaries, strategic plans and expected
financing and benefits relating to such plans (including steps to be taken to
improve the performance of domestic superstores, the downsizing of the
Waldenbooks Specialty Retail Segment and the new proprietary Web site and its
roll out to superstores).
These statements are subject to risks and uncertainties that could cause
actual results and plans to differ materially from those included in the
company's forward-looking statements. These risks and uncertainties include,
but are not limited to, consumer demand for the company's products,
particularly during the holiday season, which is believed to be related to
general economic and geopolitical conditions, competition and other factors;
the availability of adequate capital to fund the company's operations and to
carry out its strategic plans; the performance of the company's information
technology systems and the development of improvements to the systems
necessary to implement the company's strategic plan, and, with respect to the
exploration of strategic alternatives including the sale of certain parts of
the company or the sale of the entire company, the ability to attract
interested third parties.
The company's periodic reports filed from time to time with the Securities
and Exchange Commission contain more detailed discussions of these and other
risk factors that could cause actual results and plans to differ materially
from those included in the forward-looking statements, and those discussions
are incorporated herein by reference. The company does not undertake any
obligation to update forward-looking statements.
SOURCE Borders Group, Inc.
CONTACT: Investors, Ed Wilhelm, +1-734-477-4245, or Media, Anne Roman,
+1-734-477-1392, both for Borders Group, Inc.