Dobbies Garden Centres in Aberdeen, Inverness and 33 other UK locations are under new ownership today after grocery chain Tesco sold the business for £217million.
The stores are now in the hands of a group of private investors led by private-equity companies Midlothian Capital Partners (MCP) and Hattington Capital.
Their sale follows hot on the heels of Tesco selling its Giraffe restaurants to Harry Ramsden’s owner Ranjit Boparan and disposing of its 95% stake in Turkish grocery chain Kipa.
It also ends nine years of Tesco owning Dobbies.
Andrew Bracey and Barney Burgess, representing MCP and Hattington, said they were “very optimistic” about the potential of Dobbies,
“We look forward to growing the business across the UK from its base in Scotland,” they added.
Dobbies, founded by James Dobbie in 1865, has 15 garden centres in Scotland, 19 in England and one in Northern Ireland.
Its last published accounts showed pre-tax losses of nearly £50million on turnover of £153million during the 53 weeks to March 1, 2015.
Tesco said yesterday the business made a contribution of £17million to group pre-tax profits during the year to February 27, 2016.
MCP is run out of offices in London and Connecticut in the US. It was set up last year specifically for the purpose of acquiring Dobbies.
The three partners behind MCP are Mr Bracey, a corporate finance big-hitter who has worked for the likes of UBS, Credit Suisse, Jefferies & Co and Barclays, Connecticut-based retail specialist Neil Currie and Royal Bank of Scotland corporate development director Aidan Clegg, who has previously held senior management roles at UBS, BNP, Nomura International and BNP Paribas.
Mr Clegg said yesterday the successful deal for Dobbies was 18 months in the making and involved mainly UK-based “wealthy families”.
An approach last year was rebuffed, he added.
Hattington, with offices in London and Dublin, is a small-cap private equity investor focused on opportunities in the UK, Ireland and continental Europe.
Tesco took a majority stake in Midlothian-based Dobbies via a £156million deal in 2007.
The supermarket tightened its grip the following year by buying out Scottish entrepreneur Sir Tom Hunter for £36.3million.
But trading woes of recent years have prompted Tesco to sell the garden centres again as the group refocuses on its core operations
Recent speculation had identified Wyevale Garden Centres – controlled by private-equity entrepreneur Guy Hands – as a likely suitor for Dobbies, which employs about 1,350 people in Scotland among a UK workforce totalling more than 2,800.
Tesco has made a near-£25million return on its investment.
Dave Lewis, the retailers chief executive, said: “It was a difficult decision to sell … but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths.”
