BS Private Equity buys Klopman

The Italian private equity firm has acquired the European fabric manufacturing unit from bankrupt US group Galey & Lord.

Italian private equity firm BS Private Equity has completed its third deal since closing its Italian Private Equity Fund IV in August on E550m, acquiring fabric manufacturer Klopman Group from bankrupt US group Galey & Lord.

Klopman Group is the largest European manufacturer and marketer of poly-cotton fabric for work wear, protective wear and apparel. The business, established in the 1960s, has sales headquarters in London and manufacturing bases in Frosinone in Italy and Tunisia.

The business has been the strongest performing unit of Galey & Lord, which filed for Chapter 11 bankruptcy protection in February 2002. In the first nine months of 2003, Klopman posted net sales of $100.5m and operating income of $5m, making it the only Galey & Lord unit to make a profit.

BS has joined forces with MPS Venture, the private equity unit of Monte dei Paschi di Siena, and management to complete the deal. Financial details of the transaction have not been disclosed.

BS was introduced to the deal by MPS Merchant, the investment banking arm of Monte dei Paschi di Siena, which arranged and underwrote the senior credit facilities required to complete the acquisition. The business was acquired via an auction process arranged by Rothschild.

“Klopman is a business with attractive characteristics for a private equity buyer,” said Paolo Pedenza, partner at BS Private Equity. “It is a pan-European business with a niche market position and is a profitable cash generative business, which is important.”

The group will continue to be led by the current President and CEO Giuseppe Rodinò di Miglione. Current management will also stay in place to ensure the continuity of the expansion programme implemented in recent years.

“We plan to continue to grow the business organically although acquisitions are a possibility,” Pedenza added. “There are other competitors in Europe which are not in as strong a position which may become targets. Klopman was a peripheral business under the management of Galey & Lord. We intend to change that.”

The deal is the third completed in the last month for BS Private Equity. A fortnight ago, BS said it had taken a 55 per cent stake in Selcom, an Italian electronics business, for an undisclosed sum. At the end of September, BS teamed up with Centrobanca to back a management buyout of the Italian packaging group Radici.