WHSmith has revealed it will acquire Marshall Retail Group (MRG) in an effort to boost its presence in U.S. airports, according to Financial Times.
The U.K. company will buy Las Vegas-based MRG from Brentwood Associates for $400 million. The deal would “broadly double” the size of WHSmith’s international travel business, with the acquisition financed through a combination of new debt and equity.
WHSmith said that £155 million would be raised through an underwritten equity placing, while an expansion of WHSmith’s existing revolving credit facility and a £200 million term loan facility would be used to complete the deal.
“We have tracked this business for many years, but they have only become willing to sell this year,” said Carl Cowling, who will replace Stephen Clarke as WHSmith’s CEO on Nov. 1, according to the report.
Founded in 1792, WHSmith has operations in over 100 airports across 30 countries outside the U.K. MRG currently operates more than 170 locations across the United States, with 70 of those locations operating inside airports. It plans to open another 33 stores over the next five years.
Rahul Aggarwal, a partner at Brentwood, said in a press release, “MRG has made impressive progress expanding its presence in the travel retail channel by introducing innovative and thoughtful concepts that resonate with travelers and landlords alike. Importantly, the team has also built a best-in-class operational foundation to support continued rapid growth of the company.”
Roger Goddu, another partner at Brentwood, added that “MRG has developed a unique collection of retail solutions to an impressive range of partners. As MRG continues to innovate and provide airport, hotel and resort operators with new and customized concepts that enhance customer experience, we believe the company is well-positioned to continue its impressive growth trajectory.”
The transaction is expected to close no later than the first quarter of 2020.