KPS Capital Partners has reached a definitive agreement to sell WWRD Holdings to Fiskars Corporation for $437 million (£280.42 million; €391.85 million) in cash, KPG's co-founder and managing partner Michael Psaros confirmed to Private Equity International.
The firm, which manages over $5.7 billion in assets through its Special Situations Funds, acquired WWRD at the height of the financial crisis in 2009 when the luxury home-product company collapsed into receivership. Since then, it nearly halved WWRD's headcount, from 6,600 employees to 3,600, while maintaining output levels and increasing its half-billion-dollar profitability by about $150 million.
“This has been a win-win-win for everyone,” Psaros told Private Equity International. “[It's] a win for the investors, win for the management team, win for the employees and win for the communities where we operate.”
The buyout in 2009 by the $2 billion KPS Fund III involved the establishment of a new WWRD management team via the appointment of Pierre de Villeméjane as the new CEO, and created one WWRD, combining Waterford, Wedgwood, Royal Doulton, Royal Albert and Rogaška, thus saving 3,800 jobs.
Prior to this sale, KPS received a dividend recap and distributed $66 million in cash to stockholders, with anticipation for an additional cash consideration that will amount to about 10x EBITDA, according to Psaros.
Although Psaros did not disclose the specific return value on the deal, he said “we're very happy with our investment return.”
When Psaros talked to PEI in 2012, he said WWRD was targeting expansion in Asia. It originally generated five to ten percent of the company's revenues, and today it accounts for about forty percent, he said.
“We are forever grateful to KPS for its leadership and its steadfast commitment to preserving, improving and growing our business,” wrote de Villeméjane in a statement. “We are thrilled to join Fiskars, which has the resources and consumer market knowledge that will enable WWRD to scale the successful platform we created.”
Fiskars, established in 1649, providers home, garden and outdoor products and is listed on Nasdaq OMX Helsinki. The transaction, for which the companies held the first meeting in late 2014, is expected to be completed this summer.
KPS received legal counseling from Paul, Weiss, Rifkind, Wharton & Garrison LLP and WWRD from Locke Lord LLP. Dave Friedland and Cosmo Roe of Goldman Sachs advised WWRD on the deal.
Fiskars shares were up 1.13 points, or 6.32 percent, at €19.00 per share in US morning trading on 11th May, giving the firm a market capitalisation of €1.46 billion.