Private equity firm KPS Capital Partners announced it has sold Waterford Wedgewood Royal Doulton to the Finnish Fiskars Corporation. The US private equity company has agreed to sell in a deal worth $437 million.
Saving The Company
The US-based private equity firm bought former Irish-listed crystal and ceramics company in 2009. At the time, the company was under administration. According to the Financial Times, the company was “burning cash at a rate of $110m a year” when the private equity firm took over. But the firm helped the famous company get back on its feet and the company broke even in the first year. Since then, it has managed to grow its earnings before interest, tax, depreciation and amortisation by $150 million.
The private equity firm introduced many savings. Some of it was achieved by moving around 40% of the workforce overseas to locations with cheaper production costs. Michael Psaros, managing partner at KPS Capital Partners, was quoted in the Telegraph telling the company had been “thoroughly shattered” at the time of the takeover and he blamed it largely on management failures. The newspaper said the private equity firm’s main aim was to create “new business strategy and result-driven corporate culture” at Waterford Wedgewood Royal Doulton.
The company is currently in the process of investing £34 million in a new production facility and visitor centre in Stoke. The hope is that the centre would attract around 170,000 visitors annually and become one of the leading tourist attractions in the UK. For the Finnish company, the acquisition will be key in terms of its expansion in Asia, as well as the US. Waterford Wedgewood Royal Doulton has an established market presence in both regions. From its $450 million turnover in 2014, 40% of sales were from Asia. Irish Times reported the company increased its global sales by 13% last year.
Pierre de Villeméjane, the CEO of Waterford Wedgewood Royal Doulton, said in the official statement, the deal with the iconic Finnish brand will “ensure that the WWRD brands will retain and indeed grow their iconic status around the world and capture the ongoing growth in luxury demand”.
The deal will be worth $437 million as mentioned above and see Fiskars Corporation buy the full 100% of the shares in the holding group. The price is a cash payment and made on debt free basis. Kari Kauniskangas, president and CEO of Fiskars Corporation, said in the official statement, “We are delighted to be bringing together WWRD’s portfolio of iconic luxury home and lifestyle brands with Fiskars’ highly regarded Living brands of Iittala, Royal Copenhagen, Arabia and Rörstrand, which are renowned for their Scandinavian design and heritage.” Furthermore, Kauniskangas said the company “is set to become a leading consumer goods company in the area of luxury and premium home and lifestyle products focusing on table top, giftware and interior décor.”
The Finnish company is among the country’s oldest and it is most known for its luxury home ware and garden products. The deal is likely to be finalised in the coming months, as it is still subject to regulatory approval.