American & Efird Global, a portfolio company of KPS Capital Partners, will acquire substantially all of the industrial and consumer thread business of Gütermann Holdings. Completion of the transaction is expected on June 30, 2014.
American & Efird Global (A&E) is the largest US manufacturer and the world’s second-largest manufacturer and distributor of industrial and consumer sewing thread, embroidery thread and technical textiles. A&E thread is used by producers of apparel, automotive components, home furnishings, medical supplies, footwear and certain industrial products. A&E owns or operates 22 manufacturing facilities and employs over 9,000 associates around the world directly or in partnership with joint venture partners. KPS acquired A&E from Harris Teeter Supermarkets (now a subsidiary of The Kroger Co. (NYSE:KR)) in November 2011. A&E is headquartered northwest of Charlotte in Mt. Holly, NC (www.amefird.com).
“The transformation of A&E under KPS’ ownership is remarkable. A&E has exceeded all of our expectations for growth on a global scale by successfully expanding into adjacent geographies, products and end-markets,” said Michael Psaros, a Managing Partner of KPS. “The strategic and industrial logic of A&E acquiring Gütermann is extraordinarily compelling as it will even further advance A&E’s industry-leading quality, customer service and innovation, delivered through an integrated and truly global manufacturing footprint. A&E’s conservative capital structure, absence of large unfunded pensions and other legacy obligations, coupled with its access to KPS’ material capital resources, positions the company to grow aggressively organically and through acquisition.”
Gütermann is a manufacturer and distributor of sewing thread products for consumer and industrial applications. The company’s products serve a variety of end-markets, including apparel, shoes, leather goods, work wear, home textiles and automotive end markets. Gütermann has a highly regarded brand name globally and a strong reputation among European apparel and non-apparel brands. Gütermann owns and operates four manufacturing facilities located in Germany, Spain, Mexico and India, and employs approximately 1,000 associates around the world. The company was founded in 1864 and is headquartered in Gutach, Germany (www.guetermann.com).
“The acquisition of Gütermann is a critical strategic step in the growth of A&E. We are very impressed with Gütermann’s diverse product portfolio, customer base, premium quality and technical capabilities. Gütermann’s strong market position in Europe coupled with A&E’s worldwide manufacturing and distribution footprint and strong brand recognition in North America and Asia is an ideal combination. This acquisition furthers our commitment to support our customers globally with high-quality localized supply, technical resources, customer service support, and the highest environmental and social responsibility. A&E has made tremendous progress under KPS ownership and, with the strategic addition of Gütermann, I believe our future is even brighter,” said Fred Jackson, Chief Executive Officer of A&E.
KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with $6 billion of committed capital focused on investing in restructurings, turnarounds and other special situations. The KPS investment strategy targets manufacturing and industrial companies with strong market positions that are going through a period of transition or experiencing operating or financial difficulties. The firm’s portfolio companies have aggregate annual revenues of approximately $7.6 billion, operate 99 manufacturing plants in 26 countries, and employ over 47,000 associates worldwide. KPS Capital Partners is headquartered in New York (www.kpsfund.com).
Financing for the transaction will be provided by a syndicate of banks led by Merrill Lynch along with Wells Fargo Securities, and PNC Capital Markets acting as Joint Lead Arrangers.
2014 PEPD • Private Equity’s Leading News Magazine • 6-16-14