KKR has acquired Arle Capital Partners’ stake in Swedish mattress manufacturer Hilding Anders (HA), becoming majority shareholder.
The deal comes three years after KKR provided a €350m payment-in-kind facility with a subordinated position in HA as part of an €800m refinancing by Arle, which saw net debt reduced from 8.1x EBITDA to 4.8x, according to unquote" data.
KKR's investment continues nearly two decades of private equity ownership for HA, having first been acquired by now-defunct Atle Private Equity in 1999. With KKR's backing, HA expects to buid on its positions in Europe, Russia and Asia.
According to unquote" sister publication Debtwire, senior and second lien lenders to HA approved an amend and extend (A&E) request on the company's debt facilities in July 2016. The A&E request saw interest on the loan facilities increase and the lenders receive a consent fee. According to Debtwire coverage, the documentation for KKR Credit's PIK note in 2013 allowed the GP to take over HA without triggering a change of control clause, though the A&E saw some definitions around this clause cleaned up.
The deal is subject to regulatory approval. KKR had not responded to a request for comment by the time of publication.
Hilding Anders was acquired in a buyout by Atle Private Equity in 1999 and came under Ratos and 3i's ownership two years later, as part of the Swedish and British GPs' direct secondary purchase of Atle's portfolio.
Atle re-entered the equity structure in April 2001 through a SEK 450m round of financing, provided alongside Nordic Capital, with both GPs subsequently exiting in December 2003, when HA was wholly acquired by Investcorp for €420m.
In December 2006, Arle Capital Partners – then Candover ð tapped its Candover 2005 Fund to acquire HA from Investcorp in a SEK 9.2bn (€1bn) EV secondary buyout.
Three years later Candover brought MezzVest in as a minority shareholder in HA, when the pair injected around SEK 500m into the company to keep it afloat in the aftermath of the global economic crisis.
A follow-on round of £47.5m came six months later in June 2010, with Candover providing additional funding from its Candover 2008 Fund.
The most recent transaction for HA was in September 2013, when Arle Capital and KKR refinanced it to the tune of €800m. KKR Credit provided €350m of PIK financing, while near-term debt maturities were extended by three years until December 2017 and July 2018. HA's net debt was reduced from 8.1x to 4.8x EBITDA via the pre-payment of senior debt facilities and the firm was refinanced with existing lenders to provide a longer-term debt structure. The refinancing resulted in a liquidity position of around €90m for HA.
Hilding Anders is a Malmö-based manufacturer of mattresses. It was founded in 1939, and employs 9,500 people across 23 sites in 19 countries.
The Swedish business generated €917m of revenues in 2015, according to KKR.
KKR Credit – Cristobal Cuart (director).
Hilding Anders – Christer Åberg (CEO).
Deal marks the second bolt-on for the business, following the acquisition of Swiss diagnostic imaging provider IRD
Deal marks the second investment made from the GP's 2016-vintage sixth vehicle, which closed on £660m
Acquisition is the company's first out of two planned for this year with ActoMezz's backing
Total commitments for the fund fell some way short of the vehicle's €350m target and €400m hard-cap