Australian supermarket operator Woolworths has sold its Dick Smith consumer electronics chain for A$20 million to private equity firm Anchorage Capital Partners.
The Sydney-based retailer expects to complete the deal this year and receive initial cash proceeds in the 2013 financial year with possible earn-outs from the future sale of the chain, the company said in a statement. Woolworths took a A$420 million restructuring provision to divest Dick Smith this year, and won't face any future downside, it said.
"These businesses were a small part of Woolworths and this divestment will allow us to be fully focused on the core parts of our business," chief executive Grant O'Brien said.
Sydney-based Anchorage targets established companies with strong brands and an enterprise value of between A$50 million and A$150 million, according to its website. Last year it sold the New Zealand Burger King franchise to US private equity firm Blackstone.
Dick Smith Electronics operates 325 stores on both sides of the Tasman, with some 4,500 staff. The New Zealand unit posted a 5.6 per cent fall in annual sales to $321.8 million with profit almost halving to $3.6 million in the 12 months ended June 30, 2011.
Separately, Woolworths said it has agreed to sell its interest in Woolworths Wholesale in India for A$35 million.
The supermarket chain's shares rose 1.1 per cent to A$29.28 yesterday, and have gained 15 per cent this year.