In a significant move for the UK retail sector, the well-known kitchen supplier Magnet has been acquired by private equity firm Alteri Investors. The deal, which involves no upfront payment, sees Alteri take on control of the business and its substantial liabilities as it aims to engineer a turnaround.
A Strategic Handover for Future Growth
The Swedish parent company, Nobia Group, has transferred ownership of Magnet to London-based Alteri Investors. Crucially, the transaction involves no initial charge. Instead, Alteri will assume responsibility for approximately £60.3 million in liabilities tied to Magnet's leased network of UK showrooms. The agreement is anticipated to be finalised in the first half of this year.
Nobia's CEO, Kristoffer Ljungfelt, stated that divesting the UK operation provides Nobia with the best opportunity for profitable future growth. The company highlighted that challenging market conditions in the UK following Brexit and the pandemic have persisted, with the shop estate requiring further investment. For the 12 months leading to the end of September last year, the UK business reported operating losses of around £8.7 million.
What the Deal Means for Magnet's Operations
The takeover includes Magnet's manufacturing base in Darlington, which employs about 450 people and produces the majority of its kitchens. Nobia will retain the defined benefit pension plan, valued at roughly £6.4 million. As part of the arrangement, Alteri may pay a future consideration to Nobia if it successfully turns the UK business around.
Alteri Investors, a specialist in retail and consumer turnarounds with brands like Bensons for Beds in its portfolio, has already outlined plans for Magnet's future. New showrooms are planned in the coming months, including smaller-format sites on high streets, aiming to increase accessibility for customers.
Leadership Confidence in the New Partnership
Sophie Rose, CEO of Magnet, welcomed the investment as a "real vote of confidence" in the business and its team. She highlighted the company's progress across retail, trade, and B2B sectors and expressed excitement about accelerating their three-year growth plan with Alteri's support and expertise.
Arnold Vos, Investment Partner at Alteri Investors, praised Magnet's strong heritage and resilience. "We are very excited to support a specialist kitchen provider with such strong heritage and a clear plan for growth," Vos said. "The business has shown resilience in a challenging market and has built solid foundations for the next phase."
The acquisition marks a pivotal new chapter for Magnet as it seeks to stabilise and grow under new ownership, with a clear focus on expanding its retail presence and leveraging its manufacturing strength in Darlington.
