Target: WWRD Holdings Ltd
Price: $437 mln
EBITDA Multiple: 10x EBITDA, adjusted
Buyer: Fiskars Corp
Seller: KPS Capital Partners
Financial Advisor: Goldman Sachs
Legal Counsel: Paul, Weiss, Rifkind, Wharton & Garrison LLP for KPS
“This was the most shattered business we’ve ever seen,” said Michael Psaros, managing partner and co-founder of KPS, which created WWRD out of a company that had bankruptcies in 10 jurisdictions in 2009 at the height of the financial crisis. The firm’s turnaround effort not only saved WWRD from bankruptcy, but also preserved about 3,800 jobs, Psaros said.
The company had negative EBITDA of $110 million when KPS purchased it. By the time it was sold on May 11, the company’s EBITDA had grown to about $45 million.
Psaros declined to comment on the firm’s investment gain on the deal, but he said WWRD amounted to a “win-win-win” for the firm, the company and investors, who are “very happy” with the result.
Goldman Sachs hosted an auction for WWRD that attracted interest from private equity firms, but none offered the value of Fiskars, a leading global supplier of consumer products for the home, garden and outdoors, Psaros said. Fiskars is traded on the Nasdaq OMX Helsinki exchange.
The transaction values WWRD, which makes Waterford, Wedgwood, Royal Doulton, Royal Albert and Rogaška branded products, at 10x EBITDA, including closing adjustments and future consideration.
“We really changed what was a tabletop-focused home products company into a company of leading brands in the luxury home and lifestyle category,” Psaros said. “We put our capital and our reputation at risk in this undertaking.”
Along the way, KPS brought on WWRD CEO Pierre de Villeméjane, who previously led KPS portfolio company Speedline Technologies. He remains CEO of the company.
KPS also cut costs by eliminating the “quadruple redundancy” WWRD had with its four core brands when it was acquired in 2009, Psaros said.
KPS preserved the Wedge, Waterford, Royal Doulton and Royal Albert Brands, built up a global presence with 35 percent of revenue from Asia, and acquired Steklarna Rogaška in 2013. WWRD paid a $66 million dividend to stockholders during its six-year hold period with KPS.
KPS also build the House of Waterford Crystal in Waterford, now a popular tourist site in Ireland, with a manufacturing facility. It’s currently redeveloping the Wedgewood Estate in England, including a manufacturing plant, retail store and museum.
Included in the history of the company is the role of Josiah Wedgewood, who modernized production of pottery and established himself as a leading opponent of slavery.
“This was heritage that needed to be preserved,” Psaros said. “We were the only ones who were willing to do it.”
The deal is expected to close this summer.