19 Aug 2005 £84M Sale of Interfloor Group
Rutland Partners (“Rutland”), the UK private equity partnership, announces that it has agreed the sale of Interfloor Group Limited (“Interfloor”) to a management team backed by European Acquisition Capital (“EAC”) in a secondary buy-out for a consideration of £84.1 million.
Interfloor is the largest manufacturer of carpet and laminate underlay and related products in Europe, having the leading position in the mature UK sponge underlay market, with total UK sales of £122 million. It operates from two UK manufacturing facilities in Rossendale, Lancashire and Dumfries, Scotland. It also manufactures and supplies a wide range of related accessories and tools. The Company has a separate subsidiary in Morris, Illinois, which manufactures underlay for the growing North American market. Its well known brands include Duralay®, Gripperrods® and Tredaire®.
Rutland formed Interfloor in May 2002 following the simultaneous acquisitions of Duralay from Cinven and Gates Consumer and Industrial from Tomkins plc for a combined purchase price of £60 million (excluding transaction costs). The original acquisition was funded with £21.2 million of equity from the Fund and £42 million of debt.
Since then Rutland has merged the businesses and implemented an operational restructuring of Interfloor’s manufacturing and distribution to realise the potential of the complementary strengths of the combined business. These changes have resulted in both a strong improvement in the profitability of the Interfloor group and a reduction in its debt.
After repayment of outstanding bank debt of approximately £27.0 million and payment of various transaction related costs and pensions contributions, distributable proceeds to shareholders (excluding Interfloor management) are estimated to be £50.0 million.
Commenting on the sale, Nick Morrill of Rutland said:
“The successful integration, restructuring and sale of the Interfloor business is a prime example of a Rutland investment. As an active investor, we believe we have helped management add value to a complex situation in order to improve trading performance. We believe that EAC are acquiring a strong business with a good future.”
The sale of Interfloor is the second full disposal by the Rutland Fund, the first being the successful turnaround and sale of Edinburgh Woollen Mill in November 2002.
The Interfloor transaction was coordinated on behalf of Rutland by Nick Morrill and Jonathan Brooks.