Rutland Partners, the UK lower midmarket turnaround firm, has sold carpet underlay company Interfloor Group to a management team backed by European Acquisition Capital.
The sale, valued at £84.1 million ($151.6 million; €124 million), represents a multiple of 2.4 times the firm’s original investment. The firm expects to distribute approximately £50 million to shareholders.
Interfloor manufactures carpet and laminate underlay products and related accessories under brandnames including Duralay, Gripperrods and Tredaire. It operates two UK manufacturing facilities, at Rossendale, Lancashire, and Dumfries, Scotland. It also has a North American subsidiary, operating from Morris, Illinois.
The company was formed in May 2002, following Rutland’s simultaneous acquisitions of Duralay, from Cinven, and Gates Consumer and Industrial, from engineering group Tomkins plc. The combined purchase price was £60 million, including £21.2 million of equity and £42 million of debt.
“We combined the companies to allow synergies and economies,” Rutland chairman Michael Langdon told PEO. “We also rationalised the company’s plant and manufacturing processes, and altered its distribution methods.”
He added that the firm decided to retain the existing product names because of brand name recognition.
Rutland, which describes itself as a “turnaround fund”, invests in underperforming companies with enterprise values of between £20 million and £50 million. Its activities are funded partly through a private equity fund, and partly through the listed Rutland Investment Trust.
This is the second disposal by the Rutland Fund. It follows the sale of EWM Group, the owner of clothing retailer Edinburgh Woollen Mill, to chief executive Philip Day for £67.5 million in November 2002.