Montagu and Electra divest TM Group

The UK newsagent and convenience store operator has been sold to management and Bank of Scotland in one of Europe’s largest integrated finance-led secondary buyouts.

Montagu Private Equity and Electra Partners Europe have exited their investment in newsagent and convenience store operator TM Group through a secondary management buyout.

Bank of Scotland Corporate provided a £165 million integrated debt and equity package to support the existing management of TM Group. According to DLA Piper, which advised Bank of Scotland Corporate on the deal, TM is one of the largest integrated finance-led secondary buyouts to date.

The majority of equity will be held by management and employees, with Bank of Scotland taking a minority stake.

TM operates over 1,300 trading outlets in the UK under the brand names McColls, Martins, Forbuoys and Dillons. Based in Brentwood, Essex, TM employs over 10,000 branch staff and 7,000 home news delivery staff.

The secondary MBO provides an exit route for incumbent private equity investors Montagu Private Equity and Electra Partners, which acquired TM in 1995.

Under private equity ownership, TM has made a number of strategic acquisitions and disposals, repositioning itself as neighbourhood retailing group with nationwide coverage.

Montagu Private Equity and Electra Partners Europe were unavailable for comment at the time of going to press.