Travel retailer WH Smith has announced that it has agreed to sell its UK high-street business to Modella Capital for an enterprise value of £76 million (€91.3 million) on a cash and debt-free basis.
The sale of the UK high street business will enable WH Smith to focus on its key travel markets and drive shareholder value.
The deal does not include the WH Smith brand, the company noted.
The high street business, which comprises around 500 stores will be rebranded as TGJones.
The group’s travel division will continue to operate under the WH Smith brand across 32 countries, including major airport locations, hospitals, and rail stations in the UK.
Gross cash proceeds of £52 million (€62.5 million), with anticipated net cash proceeds of approximately £25 million (€30.02 million) after transaction and separation costs, will be deployed in line with the Group’s capital allocation policy, WH Smith noted.
Carl Cowling, group chief executive, commented, “As we continue to deliver on our strategic ambition to become the leading global travel retailer, this is a pivotal moment for WH Smith as we become a business exclusively focused on travel.”
Over time, WH Smith has increased its focus on travel, with the division accounting for 75% of the group’s revenue and 85% of its trading profit in its previous financial year.
The company believes that its exit from the UK high street coupled with approximately 50% of the business now international will enhance its financial profile.