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.
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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.