Currys Share Price Rallied 5.6% on Deal To Sell Its Kotsovolos Unit

The Currys PLC (LON: CURY) share price rallied 5.64% after announcing that it has reached an agreement to sell Dixons South East Europe A.E.V.E., the holding company overseeing Currys' retail operations in Greece and Cyprus under the brand name Kotsovolos, to Public Power Corporation S.A. (PPC) for a total enterprise value of €200 million (£175 million).

This transaction is being conducted on a debt-free, cash-free basis, excluding lease obligations. Following the strategic review initiated by the Group and announced on June 16, 2023, Currys' board of directors believes that this proposed sale aligns with the company's strategic goals and will benefit its shareholders.

The disposal will streamline the Group's structure, allowing it to concentrate on its larger markets in the UK, Ireland, and the Nordics. Simultaneously, it will bolster Currys’ financial position, providing increased flexibility for investments and business growth, ultimately enhancing shareholder returns.

The sale price reflects the strategic significance of Kotsovolos, prominent market presence, strong brand recognition, robust omnichannel platform, and diverse portfolio of products and services.

The enterprise value of €200 million (£175 million), when adjusted to incorporate lease liabilities of €97 million (£85 million) as of April 29, 2023, equates to a multiple of 6x adjusted EBITDA of €49 million (£43 million) and 14x adjusted EBIT of €21 million (£18 million).

The multiple signifies a substantial premium compared to the valuation of Currys' shares over the past 12 months. The Board believes the disposal will yield significantly greater shareholder value than retaining Kotsovolos within the Group.

Anticipated net cash proceeds from the disposal are approximately £156 million (€179 million) upon completion. This calculation considers transaction and separation costs, intercompany balances, and available cash within the business.

Alex Baldock, Currys Chief Executive Officer, said: “This proposed sale of Kotsovolos is an excellent outcome for Currys and for our shareholders. It recognises Kotsovolos's value and accelerates its realisation. As a Group, we're focused on maintaining our encouraging momentum in the UK&I and getting the Nordics back on track; this disposal will further strengthen the foundations on which we do both. Kotsovolos is a fine business that we've been proud to own. I'd like to thank our Greek colleagues for everything they've done for the Group, and wish them every future success.”

Currys share price.

The Currys share price rallied 5.64% to trade at 48.68p from Thursday’s closing price of 46.08p.