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An investment fund controlled by a Russian billionaire has bought health food retail chain Holland & Barrett for £1.77bn.

L1 Retail, the retail investment arm of LetterOne run by Mikhail Fridman, has bought the 1,150 store chain from US private equity giant Caralyle, which bought Holland & Barrett in 2010 as part of its $3.8bn purchase of US group Nature’s Bounty.

L1 Retail said the transaction is expected to close by September 2017 subject to customary regulatory approvals.

Founded in 1870, Holland & Barrett has grown to become Europe’s largest Health and Wellness retail chain with stores in more than 1,150 locations worldwide and a global employee base of more than 4,200 associates and staff.

Headquartered in Nuneaton, the company’s annual revenues in 2016 exceeded £610m, marking 32 consecutive quarters of like-for-like growth in the business.

Continued international growth across Scandinavia and in Holland & Barrett’s partnerships with Tesco in the UK, Apollo Hospital Group in India, and AS Watsons in Hong Kong, helped increase the company’s international operations footprint to 16 countries.

L1 Retail Managing Partner Stephan DuCharme commented: “Holland & Barrett is a clear market leader in the UK health and wellness retail market, with attractive growth positions in other European and international markets, and growing online presence, with a leading customer loyalty programme and 10 million active cardholders.

“We look forward to working with Peter Aldis, CEO, Holland & Barrett and his strong management team. We believe that the company is well positioned to benefit from structural growth in the growing £10bn health and wellness market and has multiple levers for long term growth and value creation.”

Peter Aldis, CEO, Holland & Barrett, added: “We are delighted to now be in partnership with the L1 Retail team and its advisory board of internationally-renowned retailers. We have upgraded much of our core store portfolio to concept stores to deliver additional in-store theatre and increased customer engagement.

“New products launched through our ethical sourcing programme have also been a key growth driver helping to underpin our substantial investment to gain presence across an increasingly global Health and Wellness market. We are particularly proud that our international business last year received the Queen’s Award for International Trade.

“Carlyle has been a great partner for Holland & Barrett over the last few years, investing in the brand, our people, and next generation technology, which has driven our growth. We look forward to building on this track record as we enter the next chapter with L1 Retail.”

L1 Retail aims to “buy and build the next generation of retailers internationally”.

Led by managing partner and former X5 Retail Group CEO and chairman Stephan DuCharme, the fund is supported by an advisory board of including ex Lidl CEO Karl-Heinz Holland, Dunnhumby co-founder Clive Humby and former Home Retail Group CEO John Walden.

Morning update

There is little of note on the markets this morning ahead of what looks to be another relatively quiet week in terms of scheduled market announcements.

There is plenty of retail/grocery news in the weekend papers, which feature Sainsbury’s (SBRY) efforts to appease unhappy Nisa members, a big short position taken out against Tesco (TSCO) shares, the latest on attempts to rescue The Co-op Bank and Nestle (NESN) becoming the target of an activist investor. Read today’s Media Bites for more.

On the markets this morning, the FTSE 100 has started the week up 0.5% to 7,459.5pts.

A number of big grocery names have made a positive start to the week, including Reckitt Benckiser (RB), up 1.3% to 7,956p, Associated British Foods (ABF), up 1.1% to 2,964p, Ocado (OCDO), up 1% to 304.8p and Unilever (ULVR), up 1% to 4,330p.

Other risers include Science in Sport (SIS), up 8.3% to 85p, Hotel Chocolat (HOTC), up 3.7% to 375.3p and C&C Group (CCR), up 1.5% to €3.21.

Early fallers include Total Produce (TOT), down 5.3% to 174.8p, Finsbury Food Group (FIF), down 5% to 113p and Applegreen (APGN), down 3.3% to 445p.

This week in the City

In the UK the scheduled release of most note is full year results from Greene King (GNK) on Thursday morning.

Packaging firm DS Smith (SMDS) will also release its full-year numbers on Thursday.

This month’s Kantar and Nielsen monthly market share data is also due to be released tomorrow morning.

Internationally General Mills (GIS) issues its fourth quarter earnings on Wednesday, while Monsanto (MON) releases its third quarter figures on the same day.

US-listed Boots owner Walgreens Boots Alliance (WBA) also issues its third quarter results on Thursday 29 June.

In economic news, the end of the month brings the CBI Distributive Trades Surveys tomorrow morning. GFK’s monthly consumer confidence index is released on Friday morning, while the Office of National Statistics released UK GDP and balance of payment figures for the first quarter of 2017 on Friday.