Herbert Smith Freehills (HSF) and Browne Jacobson were called in to advise on the sale of UK high street retailer WHSmith to Modella Capital in a deal worth £76m.
HSF advised WHSmith, while Browne Jacobson advised Modella Capital.
WHSmith has been seeking to hive off its less profitable high street arm and focus on its travel business at airports and train stations. The deal gives Modella Capital ownership of WHSmith’s UK high street business but not its brand name, which means the 230-year-old WHSmith name will disappear from the UK’s high streets and be replaced by TGJones.
WHSmith said 85% of its trading profit came from its global travel business, which has 1,200 stores across 32 countries. The company’s UK high street arm has just under 500 stores.
Carl Gowling, WHSmith’s group CEO, said: “As our travel business has grown, our UK high street business has become a much smaller part of the WHSmith group. High street is a good business; it is profitable and cash generative with an experienced and high-performing management team. However, given our rapid international growth, now is the right time for a new owner to take the high street business forward and for the WHSmith leadership team to focus exclusively on our travel business.”
Modella Capital is a specialist retail and consumer investment firm, and owns brands including Hobbycraft, which it acquired last August. Moore Kingston Smith was the legal advisor on that deal.
The Browne Jacobson team advising Modella on the WHSmith deal was led by partner Sandra Wong, supported by Matthew Dorman (principal associate, corporate), Dina Hansotia (associate, corporate), Emma Roake (partner, commercial), Duncan McMeekin (legal director, commercial), Nick Smee (partner, IP), Suki Tonks (partner, property retail), Claire Burns (legal director, property retail), and Craig Thomas (senior associate, tax).
The HSF team advising WHSmith included partners Ben Ward, Bob Moore, Hayley Brady, Will Nevin and Casey Dalton.
Greenhill & Co was financial advisor to WHSmith on the deal. The transaction doesn’t include WHSmith’s online greeting card business, funkypigeon.com, for which the group said it was also exploring a possible sale.
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