Waterstones sale to Elliott completes

The purchase of Waterstones by Elliott Advisors has now completed.

It was revealed in April the European private equity arm of the American hedge fund had bought a majority stake in the retailer, with previous owner Russian oligarch Alexander Mamut’s Lynwood Investments retaining a minority stake, although the percentage of the business each will own has not been disclosed.

James Daunt, who remains chief executive of the retailer, told The Bookseller: “We announced in April the acquisition of a majority interest in Waterstones by Elliott Advisors. The purchase has now completed. We have a new owner then, signed, sealed and the keys handed over. We are very pleased to welcome them.”

The terms of the deal have not been disclosed, but Elliott provided all the financing for the transaction, including the consideration and ongoing operational finance.

It was also revealed that Daunt's key leadership team will also remain in place at Waterstones following the deal.

At the time the sale was announced, Daunt said: “This is a very happy outcome for Waterstones. Our booksellers can be immensely proud to have proved through good, old-fashioned bookselling, the enduring appeal and worth of real bookshops. I thank Lynwood Investments for their invaluable support through this turnaround, and we enter new ownership looking forward with great optimism to the next chapter in the development of Waterstones”, adding “a new ownership does bring a different energy to the company right from the beginning and this owner has deep pockets."

The bookselling chief also spoke of his hopes that the chain would expand under the new ownership and open stores at a faster rate. “We’re very much in expansion mode, we’re opening up new shops,” he said.

Paul Best, head of European Private Equity at Elliott confirmed the firm planned to grow the business when the sale was first announced.

“As the leading physical book retailer in the UK, Waterstones is a mainstay of UK high streets and has a huge and loyal customer base.  We look forward to supporting James Daunt and his entire team over the long-term as they continue to build and grow the business,” he said.

Publishers, agents and authors have welcomed the fact that Daunt has been retained by the new owners, along with his management team. The firm is expected to appoint a new board, though.

Waterstones’ sales stood at £403.8m in the 52 weeks to 29th April 2017, down 1.3% (2016: £409.1m). Pre-tax profit meanwhile was up 80% to £18m (2016: £9.9m), and operating profit jumped 28% to £26.6m (2016:20.8m), although profit after tax fell to £16.1m, an 8.5% fall from £17.6m a year earlier.