Matalan lenders pledge £100m of new investment after seizing control

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Matalan’s lenders have taken over the ownership of Matalan after a prolonged corporate battle with former chair and co-founder John Hargreaves.

Matalan store Cricklewood

Matalan has been acquired by a group of investors led by Invesco, Man GLG, Napier Park and Tresidor

The fashion and homeware retailer announced on Monday, January 16, that it had been acquired by a group of investors led by Invesco, Man GLG, Napier Park and Tresidor.

In a deal that ended Hargreaves’ control over the firm, investors promised an additional £100m in new capital to be invested in the growth of the brand and an extension of debt maturities to 2027.

The new owners also agreed to a “day-one significant debt reduction” of £257m, bringing Matalan’s total debt to £336m.

The transaction, which is scheduled to complete on January 26, 2023, will mark an end to the strategic sales process launched in September 2022.

Chief financial officer Stephen Hill said on behalf of Matalan’s board of directors: “Matalan is a fantastic business and I am pleased that, with the support of our first lien noteholders, its ongoing future has been secured via a materially lower level of debt and a reset balance sheet.

”As we transition to new ownership and having worked with John and the Hargreaves family for over 20 years, it would be remiss not to emphasise the contribution they have made to building the great business we have today and the many opportunities that lie ahead. On behalf of the Matalan team, I would like to express our sincere thanks and appreciation.”

The finalisation of the deal knocked out all other competitors including Hargreaves, who was bidding alongside Wall Street private-equity fund Elliott Management.

A spokesperson for the Hargreaves family private office said: “John Hargreaves and the Hargreaves family are disappointed by today’s announcement by Matalan.

“From the day he founded the company in 1985 through to the current sales process, John’s focus and commitment has been to act in the best interests of the company, its employees, suppliers and business partners.

“The Hargreaves family and Elliott bid would have left Matalan with less than £200m of debt and ultimately ensured it was best positioned for long-term success. John Hargreaves does not believe the deal announced today with the first lien investors is an optimal outcome for Matalan and its key stakeholders.

“In particular, he is concerned that it fails to address the needs of the business to adequately deleverage its balance sheet and secure an appropriate long-term owner for the company, both of which were central to the Hargreaves family-led bid.”