Elliott Closes Acquisition of Barnes & Noble

Elliott Advisors has completed its acquisition of publicly traded Barnes & Noble in an all-cash transaction with an enterprise value of $683 million.

Beginning in October 2018, a special committee of the Barnes & Noble board of directors began a review to determine strategic alternatives for the company including a possible sale. On June 7th, the company unanimously approved the Elliott transaction with Leonard Riggio, the founder and chairman of Barnes & Noble, also providing support (Elliott to Acquire Barnes & Noble).

Through January 2019, Barnes & Noble had TTM revenue of $3.6 billion and TTM EBITDA of $111 million. This equates to an EBITDA valuation multiple of 6.15x.

Barnes & Noble is the nation’s largest retail bookseller, and a leading retailer of content, digital media and educational products. The company operates 627 Barnes & Noble bookstores in 50 states, and the e-commerce site BN.com. Barnes & Noble also operates The NOOK Store which sells digital books, periodicals and comics. Barnes & Noble is headquartered in New York (www.barnesandnobleinc.com).

The buy of Barnes & Noble follows Elliott’s acquisition in June 2018 of Waterstones, the largest retail bookseller in the United Kingdom. Waterstones has 293 total bookshops in the UK, Ireland, Brussels and Amsterdam. According to the company, it is the only national specialist book retailer of scale in the UK. Waterstones also sells products online through its e-commerce site Waterstones.com. The company, led by CEO James Daunt, had revenues of £402 million ($512 million) in 2018 and is headquartered in London (www.waterstones.com).

With the close of this transaction, Mr. Daunt will now also assume the role of CEO of Barnes & Noble. “This is a very good day for bookselling,” said Mr. Daunt. “Barnes & Noble is the greatest of all bookstore names and will now benefit from the support of an owner committed to physical bookselling. With investment and concentration on the core principles of good bookselling, the prospects for this extraordinary company are bright. I look forward very much to working with the booksellers at Barnes & Noble, being already indebted to Len Riggio for his wisdom and grateful for the welcome and professionalism of the executive team during the acquisition process.”

“Our investment in Barnes & Noble, following our acquisition of Waterstones just over a year ago, demonstrates our commitment to bookselling and to real bookstores,” said Paul Best, head of European private equity at Elliott. “Barnes & Noble has an extraordinary heritage, one that we want to protect and grow. We look forward to working with James Daunt and the Barnes & Noble management team in this exciting endeavor.”

Elliott Management is an activist themed hedge fund led by billionaire Paul Singer (his middle name is Elliott). The firm, with $38 billion of assets under management, was founded in 1977 and is headquartered in New York (www.elliottmgmt.com).

© 2019 Private Equity Professional | August 7, 2019

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