Hicks, Muse, Tate & Furst has successfully completed a recapitalization of leading U.K. furniture retailer Christie-Tyler, the former furniture division of Hillsdown Holdings. The recapitalization will enable Hicks Muse’s investors to recoup all of their original investment in Christie-Tyler and to realize a profit, while Hicks Muse and its co-investors will continue to own 100% of the equity of Christie-Tyler.
The group has raised GBP145 million in new senior credit facilities, including a GBP25 million undrawn revolving facility, and GBP35 million in senior subordinated loan facilities through Barclays Capital. These proceeds will be used to pay a substantial dividend to Hicks Muse’s investors, as well as to repay existing indebtedness.
Hicks Muse backed Christie-Tyler in 1999 when it was part of Hillsdown Holdings. The firm originally invested GBP530 million in the group and also assumed GBP286 million in liabilities.
Lyndon Lea, a partner at Hicks Muse, based in London, said, “Christie-Tyler has produced strong growth and consistent cash flow under [our] ownership. With the successful recapitalization of the company, we have been able to realize a portion of the value created in the investment to date through the payment of a dividend.”
Christie-Tyler has pursued an aggressive growth strategy. The CEO, James Benfield, who joined Christie-Tyler in May 2001 from Marks & Spencer, has worked with Hicks Muse to reorganize Christie-Tyler’s operational structure, enabling the business to maximize its cost savings across its various subsidiaries in the U.K. and positioning Christie-Tyler to achieve strong growth in both sales and profitability.
The recapitalization is the latest in Hicks Muse’s strategy to separate the furniture, biscuits, grocery and poultry businesses of Hillsdown into stand-alone companies with clearly defined strategies.
Horizon Biscuits has been integrated with Burton’s Biscuits to create the second largest biscuit manufacturer in the U.K., with brands including Cadbury, Wagon Wheels, Jammie Dodgers and Maryland Cookies. Premier International Foods, the former Hillsdown grocery business, has undergone a substantial restructuring initiative led by Hicks Muse to focus its operations on its core canning, preserves and hot beverages sectors. Premier markets its products under leading brand names such as Chivers-Hartley, HP, Typhoo and Cadbury.
Hicks Muse’s reorganization of the former Hillsdown businesses has also included the separation and divestiture of the assets of the poultry division. The proceeds, which represented a profit of around three times the firm’s initial investment in the poultry business, were applied to repay debt incurred to finance the Hillsdown Holdings acquisition.