US wholesaler BJ's Wholesale Club to be acquired by PE firms for $2.8 bn

Private equity firms, Leonard Green & Partners and CVC Capital Partners today agreed to buy BJ's Wholesale Club, the third-largest wholesale retailer in the US, for around $2.8 billion.

With around 190 warehouse clubs in 15 states in the US, BJ's Wholesale is the country's third-largest wholesale retailer, after Costco Wholesale Corp. and Wal-Mart Stores' Sam's Club.

Headquartered in Westborough, Massachusetts, BJ's Wholesale Club, is an operator of membership warehouse clubs in the Eastern US.

The company sells high-quality brand-name and private label food and general merchandise. It currently employs more than 24,000 people,

Under the terms of the deal, the PE firms will pay $51.25 a share, a premium of 6.6 per cent to BJ's yesterday closing price of $48.08.

''BJ's will benefit from the continued execution of our business plan and the significant retail expertise of our new partners at LGP and CVC, as well as from continued investments in our clubs, our people and technology, and the future of our business,'' Laura Sen, BJ's chief executive, said in a statement.

Based in Los Angeles, California, Leonard Green with approximately $9 billion in equity capital under management already holds a 9.3 per cent stake in BJ's. The PE firm, which has been expanding its retail properties, put BJ's in play last year forcing the retailer to hire Morgan Stanley as its adviser on a possible auction.

On 17 June Leonard Green teamed up with CVC Capital Partners to bid for BJ's. Its retail portfolio of investments include J Crew, Jo-Ann Stores, Del Taco Holdings, Neiman Marcus Group, PETCO Animal Supplies, The Container Store, David's Bridal, Whole Foods Market and others.