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HMTF makes gain on Christie-Tyler

Hicks, Muse, Tate & Furst has completed a recapitalisation of leading UK furniture retailer Christie-Tyler, the former furniture division of Hillsdown Holdings. The recapitalisation will enable HMTF’s investors to recoup all of their original investment in Christie-Tyler and to realise a profit, while HMTF and its co-investors will continue to own 100 per cent 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 HMTF’s investors, as well as to repay existing indebtedness.

HMTF backed Christie-Tyler in 1999 when it was part of Hillsdown Holding. The firm originally invested GBP530 million in the group and also assumed GBP286 million in liabilities.

Lyndon Lea, partner of HMTF based in London, said: “Christie-Tyler has produced strong growth and consistent cash flow under HMTF’s ownership. With the successful recapitalisation of the company, we have been able to realise 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 under HMTF’s ownership. CEO, James Benfield, who joined Christie-Tyler in May 2001 from Marks & Spencer has worked with HMTF to reorganise Christie-Tyler’s operational structure, enabling the business to maximise its cost savings across its various subsidiaries in the UK.

The recapitalisation is the latest in HMTF’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 UK with brands including Cadbury, Wagon Wheels, Jammie Dodgers and Maryland Cookies. Premier International Foods, the former Hillsdown grocery business has undergone a restructuring initiative led by HMTF 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.

HMTF’s reorganisation of the former Hillsdown businesses also included the separation and divestiture of the assets of the poultry division. The proceeds, which represented a profit of around three times HMTF’s initial investment in the poultry business, were applied to repay debt incurred to finance the Hillsdown Holdings take-private.