A US firm has agreed to buy parts of crystal and china manufacturer Waterford Wedgwood. Private equity group KPS Capital Partners has signed a letter of intent to acquire “certain assets” of the group…
A US firm has agreed to buy parts of crystal and china manufacturer Waterford Wedgwood. Private equity group KPS Capital Partners has signed a letter of intent to acquire “certain assets” of the group after parts of its Irish business went into administration on 5 January 2009, said administrators Deloitte. KPS is a New York-based firm that specializes in buying distressed assets and once owned a German company but currently invests only in North America. “This is a critical step forward for Waterford Wedgwood,” said David Sculley, chief executive of Waterford Wedgewood, a 250-year-old company. “We commend KPS for its confidence in our company and for the enormous amount of time, effort and resources expended by KPS globally that have resulted in reaching this important stage”. KPS is known for taking controlling stakes in companies, often without any debt. The firm has about EUR 1.8 billion in committed capital. It is believed the firm has been in talks for several months with Waterford Wedgwood“s board to buy the business. The deal leaves Irish businessman Sir Anthony O“Reilly and his brother-in law Peter Goulandris around GBP 360 million out-of-pocket. Sources close to Sir Anthony described the deal as “bittersweet”, saying it was the best that could be expected for the company once it had gone into administration. They said it has yet to be decided how much KPS will ultimately pay for Waterford Wedgewood. Waterford made a pre-tax loss of GBP 55.9 million in the six months to the beginning of October 2008, and carried net debt of GBP 422million. The firm was hit by the onset of the financial crisis, with sales in October 2008 19% down on the comparable period in 2007. Sir Anthony said the board and executives received “remarkable support” to salvage the business from highest levels from the Irish and UK governments and Irish banks. Crystal maker Waterford was set up in 1783 by brothers William and George Penrose. In 1986, Waterford acquired Wedgwood to form the present company, listing on the stock exchange and expanding overseas in the 1990s.