NEW YORK CITY — February 26,2018 — KPS Capital Partners LP (KPS) announced today that it has signed a definitive agreement, through an affiliate, to sell its portfolio company American & Efird (A&E) to Platinum Equity Capital Partners. Financial terms of the transaction were not disclosed.
A&E is the largest U.S. manufacturer and the world’s second-largest manufacturer and distributor of premium quality industrial and consumer sewing thread, embroidery thread and technical textiles for the apparel, automotive components, home furnishings, medical supply, footwear and diversified industrial end-markets. Through its global network, A&E’s products are manufactured in 21 countries, distributed in 50 countries and sold in over 100 countries. A&E is a recognized industry leader in environmental sustainability and corporate social responsibility.
KPS acquired A&E in 2011 from Ruddick Corp. (now a subsidiary of The Kroger Co.) in a highly complex corporate carve-out transaction.
Under KPS’ ownership, A&E was transformed into a truly global business, doubled its revenue and nearly tripled its operating cash flow (EBITDA). KPS made A&E a better business by optimizing its global manufacturing footprint, investing in its manufacturing facilities, innovation, new product development and technology, and by implementing a process and culture of continuous improvement. As a result of KPS’ global vision and strategy for A&E, the Company acquired majority control of four market-leading former joint ventures in Sri Lanka, Bangladesh, China and India, and also acquired Gütermann GmbH, the fourth-largest company in the global premium thread industry. As a result of these acquisitions, A&E expanded into adjacent geographies, products and end-markets, and successfully transformed the global premium thread industry.
Michael Psaros, a managing partner of KPS, stated: “A&E exemplifies the KPS investment strategy of seeing value where others do not, buying right and making businesses better, consistently executed across decades, economic cycles, geographies and industries.
“We take pride in A&E’s extraordinary transformation under our ownership. A&E capitalized on KPS’ experience and ability to build industry-leading companies on a global basis. We congratulate and thank Les Miller, A&E’s Chief Executive Officer, his immediate predecessor Fred Jackson, and the senior management team for their strategic vision, brilliant execution and passion.
“We also thank A&E’s former joint venture partners Brandix Lanka Limited, Brandot International Ltd., Ningbo Veken Elite Group Co., Ltd. and, especially, Vardhman Textiles Limited for their valuable contributions to A&E’s long-term success.”
Les Miller added: “KPS was the only investor to recognize the potential to create value by investing in our company. Working in partnership with KPS, we invested significantly in our operations, technology and people, becoming a far better company. We are grateful to KPS for providing our team with expertise, capital and the resources needed to acquire and integrate five acquisitions, and for creating a lasting culture of innovation and continuous improvement. We are confident in our growth trajectory, and will continue to provide our customers with the highest levels of product quality, innovation and customer service.”
Completion of the transaction, which is expected in the second quarter of 2018, is subject to customary closing conditions.
Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel, Goldman Sachs & Co. LLC served as lead financial advisor and Nomura Securities International Inc. also served as financial advisor to KPS and A&E with respect to the transaction.
Posted February 26,2018
Source: KPS Capital Partners LP