IK-backed Kid in talks with DnB NOR over ownership

IK Investment Partner's portfolio company Kid Interior is in discussions with Norwegian bank DnB NOR, its main sponsor, regarding a transfer of ownership to the bank after running into trouble over its loans.

The Norwegian competition authority was notified in May and an ownership transfer will happen in three weeks at the earliest, according to a statement from IK. Meanwhile, the GP is working with the bank to find the best possible solution for the business. So far, IK has injected NOK 200m in equity to strengthen the company's financial position and until a former takeover takes place.

IK Invest acquired 75% of textile retail business Kid Interior, through the holding company Nordisk Tekstil Holding, in 2005 from family owners, who retained 25%. DnB NOR provided a debt package to support the deal which, according to local press, was valued at NOK 900m. In 2007 the business went through a restructuring process and new management was appointed in February 2008. However, in January this year, as a result of worsening market conditions following the financial crisis, the company was forced to notify DnB NOR that it would not be able to meet its loan obligations.

Drammen-based Kid Interior was founded in 1937 and employs about 1,000 people across 109 shops. Last year, the company generated revenues of about NOK 860m.

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