Borders sells U.K. and Ireland divisions

ANN ARBOR, Mich. Borders Group announced today that will sell its U.K. and Ireland subsidiaries to Risk Capital Partners, a London-based private equity investor. Risk Capital Partners has set up a new, wholly-owned subsidiary company (Bookshop Acquisitions Ltd.) for the purpose of acquiring Borders U.K. and Ireland. The purchase price consists of about $20 million up-front cash payment. In addition, Borders Group will receive an equity interest of approximately 17% in Bookshop Acquisitions Ltd.

The transaction includes all 41 Borders superstores located in the U.K. and the Borders superstore in Ireland, as well as all 28 Books etc. stores in the U.K. Risk Capital Partners also retains the right to use the Borders and Books etc. brand names consistent with a brand licensing agreement as part of the acquisition.

The Borders U.K. and Ireland management team will continue to be led by David Roche, who will serve as ceo of the new company.

"The sale of our U.K. and Ireland subsidiaries is a major step forward in our previously announced strategic plan to drive a turnaround of Borders Group," said ceo George Jones. "This sale allows us to focus investment and resources on our core business, which is the U.S. superstore segment, and gives the U.K. and Ireland business the opportunity to succeed with the focus and investment Risk Capital Partners will bring. In addition, the equity interest Borders Group received allows our company to participate in the potential future upside of the U.K. business."