Poundland is sold for £200m

Black Country-based budget chain Poundland has been bought by an American company for £200 million, it was revealed today.

Poundland boss Jim McCarthy hailed the deal as "great news" and said the new owners backed his plans to expand.

Previous owners Advent International had been about to auction the business, which employs 640 people at its landmark Willenhall headquarters beside the Black Country Route.

But it is understood that New York-based private equity investment group Warburg Pincus came in with its offer and sealed the deal.

The Poundland business has seen spectacular growth during the recession as shoppers packed its aisles looking for bargains.

Mr McCarthy, who will stay on as chief executive, revealed in March his £10 million plans to open another 50 stores, creating 2,000 more jobs, including bigger out-of-town stores.

It followed the opening of 61 new stores last year, giving the chain 261 branches around the UK, attracting three million customers a week.

Poundland, founded by former Wolverhampton market traders, Keith Smith and his son Steve 20 years ago, has grown to employ more than 7,000 people since it was bought by Advent for around £50m in 2002.

It pioneered single-price retailing in the UK, with everything priced at a pound from budget brands to top names such as Maxwell House coffee, Colgate toothpaste and Walkers crisps.

Poundland's latest sales figures are expected to break the £500m barrier while new owners Warburg Pincus predict sales will hit £700m in 2011.

Today Mr McCarthy said: "This deal is great news for all of our customers, colleagues and supplies and one that will support our ongoing growth plan."