Retailer B&M buys Heron Food Group for £152 million
Discount retailer B&M has splashed out £152 million to buy convenience store operator Heron Food Group as it delves deeper into the grocery sector.
B&M, itself the subject of takeover speculation, said it would acquire Heron's 251 stores, which are predominantly found in the North of England.
The acquisition of Heron will enable it to "develop and roll out a complementary, proven and profitable discount convenience grocery brand", B&M said in a stock market announcement.
It added that the combination of the two retailers can deliver a "value proposition" in an expanding sector of the grocery market.
Heron reported revenues of £274.4 million last year, earnings of £19.1 million and a pre-tax profit of £8.6 million.
The business currently employs around 3,800 people and the deal will be "immediately earnings-enhancing", B&M added.
Chief executive Simon Arora said: "B&M is already the UK's leading general merchandise discount retailer, serving four million shoppers per week.
"The addition of a complementary, proven discount convenience grocery brand to our own structural growth story gives the combined business an even longer, exciting growth runway."
Heron is currently managed and owned by Andrew, David and Michael Heuck.
Michael will retire from the business as planned, while Andrew and David remain in their existing trading and finance roles with Heron.
B&M said it plans to expand and develop the Heron business, initially through the addition of between 10 and 20 new stores per year.
Last week shares in B&M rose sharply following reports that supermarket giant Asda is mulling over a £4.4 billion takeover of the retailer.
Shares were up 0.5% to 361.3p following the announcement.