Two of the world's most prominent buyout companies, Bain Capital and CVC Capital Partners, have reportedly announced to have joined forces and pursue a proposed multibillion-pound acquisition of Boots, the UK's largest high-end pharmacy retailer.
According to insiders, Bain Capital and CVC Capital are putting up a joint bid for the beauty and health retailer, which employs over 50,000 people and operated over 2,000 locations.
According to retail insiders, Lazard bankers are advising CVC and Bain on their potential interest in Boots.
Dominic Murphy, one of CVC's managing partners as well as the architect of the £11 billion buyout of Alliance Boots by KKR, the private investment company where he worked previously, will play a crucial role in the collaboration.
As a result of his involvement in the CVC process, Murphy, who is still a Walgreens Boots Alliance (WBA) director, the US-listed parent firm of Boots, is expected to have to remove himself from boardroom meetings concerning the possible sale of Boots.
According to sources, Bain and CVC have been working on a strategy buy Boots, which was predicated upon significant investment in the company's beauty, digital, and healthcare services.
As part of a process led by Goldman Sachs, a range of other private investment companies are also likely to evaluate proposals for the business.
Murphy's excellent understanding of the Boots operations and Bain's comprehensive bid strategy are expected to put their joint offer in a strong position to succeed.
A full-fledged auction of Boots, which is expected to begin in the spring, will be considered one of the most high-profile deals involving a high-street retailer in many years.
Given the shifting nature of customer behavior and its primarily rented retail estate, with many stores on extended leases, valuing Boots is a difficult task, but analysts believe a price range of £5 billion to £6 billion is plausible.
A deal to sell Boots would also be the closing chapter for WBA’s chairman Stefano Pessina’s tenure with one of Britain's most well-known corporations.