Liverpool-based B&M European Value Retail said its subsidiary EV Retail Limited acquired Paminvest SAS, a discount retailer operating under the trading name Babou in France with a chain of 95 stores.

The total enterprise value of the transaction is €91.2 million, which includes the debt of the Babou Stores Group refinanced by B&M.

The deal was paid in cash financed by an additional loan facility.

The Seller of Babou Stores Group is PIM Participations SAS, a private family owned investment company in France.

For the year ended January 31, 2018, the Babou Stores Group delivered revenues of €347.1 million and EBITDA of €24.7 million.

“The acquisition of the Babou Stores Group will provide a base which will enable B&M to develop and grow in France its proven and profitable value retail model,” said B&M.

“B&M’s strategy for the Babou business is to apply B&M’s direct product sourcing and limited assortment SKU model, while refining Babou’s product offering. 

“The average store size, location and customer base of Babou are comparable to the highly successful B&M Homestore operation in the UK.

“The French market, alongside the existing German and UK markets in which B&M operates, has attractive dynamics including overall market size, the popularity of the growing discount channel and the healthy operating margins achieved by several incumbent operators.”

Babou Stores Group is currently led by Thierry Morter, who is retiring from the business as part of the transaction, and is succeeded by Cedric Mahieu as CEO.  

B&M CEO Simon Arora said: “B&M has made no secret of its European growth plans since its IPO in 2014.

“We are delighted that discussions with Babou over a 3 year period have led to today’s transaction, which provides us with a platform for future growth in a large and attractive market whilst also providing a stable and logical new owner for Babou.  

“We would like to welcome all Babou’s employees and stakeholders to the wider B&M family and look forward to a successful future together.” 

B&M was advised on the transaction by BofA Merrill Lynch, Ernst & Young and LPA-CGR Avocats, with Debevoise & Plimpton advising on acquisition financing. 

The acquisition financing was provided by BNP Paribas.