Leeds-based turnaround group Endless has bought Bathstore for £15m in cash.
The corporate investor in stricken companies will pay former owners Wolseley over five years.
The private equity firm said it will invest £11m in new equity capital into the bathroom retailer as part of the deal agreed two weeks ago.
The 169-store retailer has faced a difficult period with the economic downturn hitting profitability.
Bathstore recorded sales of £95m in 2011, leading to earnings before interest, tax, depreciation and amortisation of £6.5m.
Endless managing partner Garry Wilson said: “Those numbers reflect the recent economic downturn. Historically, the turnover has been as high as £140m with earnings before interest, taxes, depreciation and amortisation of £20m, only four years ago.
“I think I have bought it somewhere near the bottom of the market – but having said that we’re not planning on any uptick in the market soon.”
Reports 18 months ago put the price of the retailer at £150m.