Big expansion for Dyas after sale

Robert Dyas plans to double its UK high street presence in five years after being sold to Change Capital, the private equity vehicle of Luc Vandevelde, for Pounds 61m.

Alan Smith, former chief executive of Somerfield, will become chief executive of the 75-strong hardware store chain when the deal completes on March 23.

The departing management team, who bought 55 per cent of the company for Pounds 8m three years ago with the backing of Singer & Friedlander and Thominvest, will share Pounds 16.8m of the proceeds. The founding family will net Pounds 27.5m from the sale.

The deal, financed with an equal mix of debt and equity, is Change's first since being formed 14 months ago by the chairman of Marks and Spencer, with Euros 300m (Pounds 200m) from the Halley family, founders of France's Carrefour retail group. Its strategy is to find mid-priced retailers with growth potential.

Mr Vandevelde said Change was reviewing three deals, one "very active", another - in Europe - on a "low burn". He added: "Dyas was in our sweet spot: retail, the right size, leader in a niche, and in the UK." He said the expansion would be financed by internal cash flow and many sites had already been identified.

Change Capital had planned to complete two deals a year and was running behind target. "We had a couple of things that did not succeed," Mr Vandevelde said, adding that more than 250 deals had been looked at.

Robert Dyas, which was founded in 1872, made interim pre-tax profits of Pounds 2.2m on sales of Pounds 39m for the six months to September 2003. Sales for the 12 months to the end of March are expected to be about Pounds 90m.