Currys, the British electrical retailer, has announced its decision to exit the Greek market by selling its Kotsovolos unit to the Greek power utility, Public Power Corporation, for an enterprise value of £175 million ($214 million).
This strategic move has bolstered Currys’ stock, which surged by 5.4% during morning trading on Friday.
Over the past year, Currys had experienced a 24.3% decline in its share price, but the sale is expected to generate approximately £156 million in proceeds, which will be allocated towards reducing the company’s debt and addressing the pension fund’s accounting net deficit.
This divestiture is aimed at streamlining Currys’ operational structure, allowing it to concentrate its efforts on its core markets in the UK, Ireland, and the Nordics.
The sale will enhance Currys’ financial position, providing greater flexibility for investments and business growth, ultimately resulting in improved shareholder returns.
Despite facing sales challenges in most markets for the four months leading up to August, Currys maintained its annual guidance.
CEO Alex Baldock expressed the company’s focus on sustaining positive momentum in the UK and Ireland while working to overcome challenges in the Nordics.
Analysts at Liberum praised the deal as an “excellent outcome” for Currys, citing the achieved multiple of 14 times earnings before interest and tax (EBIT).
This multiple, when applied to the rest of Currys, suggests a valuation that is more than double the company’s share price prior to the announcement of the sale.
On the other side of the transaction, Public Power Corporation sees this deal as a transformative move in a global market undergoing significant changes in the era of energy transition.
The acquisition of Currys’ Kotsovolos unit aligns with their strategic vision as they adapt to the evolving energy landscape.
In summary, Currys’ decision to exit the Greek market by selling its Kotsovolos unit to Public Power Corporation has generated positive outcomes for the company.
It has strengthened its financial position, focused its efforts on key markets, and received favorable feedback from analysts.
Meanwhile, Public Power Corporation views this acquisition as a significant step in navigating the changing energy market landscape.