SWINDON (dpa-AFX) - WH Smith plc (SMWH.L) has reached an agreement to acquire Marshall Retail Group, a US travel retailer, for $400 million on a cash and debt-free basis. The transaction will require shareholder approval. The completion of the deal is anticipated in the first quarter of the 2020 calendar year.
MRG currently operates 170 stores in North America, with 59 of these inside airports, and generates the majority of its revenue through the sale of news, gifts and convenience products.
WH Smith expects the acquisition to result in mid-single digit earnings per share accretion in the first full financial year following completion, and to approach double digits earnings per share accretion in the second full financial year following completion.
WH Smith said the transaction will be financed through a new 200 million pounds term loan facility provided by the Group's existing relationship banks, alongside an approximately 155 million pounds underwritten equity placing. The Group's existing revolving credit facility will be expanded to 200 million pounds from the current 140 million pounds.
WH Smith said the Group's share buyback programme is being suspended to support near-term deleveraging.
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