A leading global equity company is tipped to be buying Consumer electronics and appliance retailer, The Good Guys, for over $1 Billion dollars after the company was rejected by JB Hi Fi mid last year.The Melbourne based business which had revenues last year of $2.1 Billion dollars according to various credit controllers working for major suppliers to the company, was privately touted around, as being up for sale early last year, by the current owners, the Muir family of Melbourne, who are looking to get $1 Billion dollars for the privately owned business.
The 97 store operation is owned by Muir Investments which in turn is owned by Andrew Muir, his mother, Joan and sister Carolyne.
Profits for the business at July 2010 were believed to be $106 million in earnings before interest, tax, depreciation and amortisation.
The decision to sell the business which had revenues last year of around $1.7 Billion is believed to have been made as the financial downturn hit the Australian market.
According to sources, the company started talking to investment bankers and private equity companies early in 2010.
As part of the exercise the company deliberately solicited an interview with the Financial Review in an effort to get publicity for the business among potential investors.
As a result the global private equity group Blackstone Group who have an office in Sydney, took an interest in the retailer with the firm now conducting due diligence according to sources close to the Company.
Such a deal would be Blackstone’s first retail buy in Australia.
At one stage last year The Good Guys looked at the potential acquisition of troubled retail group Clive Peeters but rejected it the company due to high level of debt and the high cost of running the business.