Interfloor Group completes £84.1m MBI

Clearwater rådgiver


European Acquisition Capital (“EAC”) private equity have acquired Interfloor Group Ltd (“Interfloor”) from Rutland Partners the UK private equity partnership, in a secondary buy-out led by MBI candidate Phil Reeder. Clearwater International were delighted to have advised on the deal, acting for the purchaser EAC and introducing Phil Reeder to the deal.

Interfloor is the largest manufacturer of carpet and laminate underlay and related products in Europe, having the leading position in the mature UK sponge underlay market, with total UK sales of £122 million. It operates from two UK manufacturing facilities in Rossendale, Lancashire and Dumfries, Scotland. It also manufactures and supplies a wide range of related accessories and tools. The Company has a separate subsidiary in Morris, Illinois, which manufactures underlay for the growing North American market. It’s well known brands include Duralay®, Gripperrods® and Tredaire®.

Rutland Partners formed Interfloor in May 2002 following the simultaneous acquisitions of Duralay from Cinven and Gates Consumer and Industrial from Tomkins plc for a combined purchase price of £60 million (excluding transaction costs). The original acquisition was funded with £21.2 million of equity from Rutland Partners and £42 million of debt. Since then the businesses have been merged and an operational restructuring implemented of Interfloor’s manufacturing and distribution, to realise the potential of the complementary strengths of the combined business. These changes resulted in both a strong improvement in the profitability of the Interfloor group and a reduction in its debt.

Interfloor has been acquired by a newly formed company backed by EAC. The management team will be headed by Phil Reeder supported by a number of existing Interfloor senior management. Mr. Reeder has held a number of senior positions in UK manufacturing industry including being the Chief Executive of two publicly quoted companies, Low & Bonar plc and Expamet International plc. Interfloor operates in a mature and stable market and its competitive advantages include strong established brands, customer relationships, manufacturing know-how, and distribution networks all of which represent a strong strategic position. EAC will hold a majority stake in the business with significant management participation. Kaupthing Bank is the senior debt provider, whilst Hutton Collins and Company is providing mezzanine debt

”Interfloor is an exciting investment for us. It enjoys a leading market position and clear competitive advantages in a mature industry with high barriers to entry as well as a high level of operational gearing. We believe there is a significant opportunity to continue to improve the profitability of the business through initiatives to further enhance operational effectiveness and efficiency.” 

Robert Mason, EAC

“Interfloor is a great business with a robust position in its market. The management team has already made significant progress integrating the Duralay and Gates businesses and this transaction, with the introduction of Phil Reeder and the new funders, will enable these improvements

Michael Reeves, CEO, Clearwater International