HMV

 

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HMV Group plc (HMV/LN) is the world's most successful retailer of music, books and videos with stores in Europe, North America and Asia.

Formed in 1998 as a joint venture between Advent and EMI Group plc, HMV Group was created by combining Waterstone's, the UK's leading specialist bookseller (acquired from WH Smith), and EMI's HMV and Dillon's businesses (HMV, the world's leading music retailer and Dillon's the UK's second largest book retailer). The deal is an excellent practical illustration of joint venturing and the benefits that can be achieved through an industrial and financial partnership. For EMI, acquiring Waterstone's via a joint venture allowed them to remain an investor in their retail business, which, although profitable, was viewed by the wider investment community as non-core to their main activities. Redeploying the cash proceeds from the partial disposal of their stake in HMV/Dillon's into their core music publishing operations satisfied institutional shareholders, whilst their residual stake in the joint venture provided additional potential upside in the enhanced retail business. The £801m (€1.3bn) transaction was completed in just three months and in May 2002, the validity of the group's vision and strategy was realised when it floated on the London Stock Exchange. The float, Advent's 127th IPO, valued the business at £1bn (€1.6bn). Not only was it a successful exit, but the first significant IPO of the year completed amid difficult market conditions. Going forward, HMV's strategy is to continue to build on and consolidate its premier international market position.

 

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Fred Wakeman

Managing Partner, Advent International plc, London
T: +44 (0)20 7333 0800