Square Four & Morgan Stanley acquire Rohde

Square Four Investments has, together with investment bank Morgan Stanley, acquired insolvent shoe manufacturer Erich Rohde KG Schuhfabriken for an undisclosed amount. Square Four sourced the deal and syndicated it to Morgan Stanley. Each investor holds 50% of the company.

Square Four Investments, which invests the money of its partners, was selected from a group of over 60 potential investors in the context of an international, structured sales process run by Carsten Koch with Roland Berger acting as M&A consultant. Factors central to winning the bid included the investor's hands-on due diligence work on-site which led to a well-founded restructuring concept for the company, as well as their long-term strategy, and investment in the brand and top line. Moreover, the location was guaranteed to be retained, and the investor is contributing personnel to the management. The investor's credibility and good reputation, especially with trade unions and employee organisations, stemming from previous restructurings, also played an important role, as well as experience of the team in the retail and consumer goods industries.

The investor plans to tighten and modernise the products range and make the company market presence more attractive by supporting marketing and design. A focus will be placed on the licensed brand Daniel Hechter, as it represents one of the few high-profile fashion brands in the shoe market, and has been licensed to Rohde exclusively for Europe. In addition to that, the investor has launched a comprehensive restructuring and consolidation programme throughout the company.

Mezzanine financing was provided by Morgan Stanley, senior debt was sourced from a local bank.

At the time of the insolvency, Rohde Group employed a total of 1,700 staff, 500 of whom were based in Schwalmstadt, the company headquarters. Rohde produces and retails a wide range of adults' and children's shoes, slippers and walking shoes. The company produces ladies' and men's shoes under the brand Daniel Hechter under license. In 2007, the turnover was approximately EUR100m.

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