News & Analysis

KPS recaps Waterford Wedgewood

Proceeds from the $167.5m recapitalisation generated a $50m cash distribution to KPS, co-investors and company management.

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KPS Capital Partners’ recapitalisation of portfolio company WWRD Holdings has generated a $50 million cash distribution for the company’s stockholders, the firm announced in a statement. 

The $167.5 million recapitalisation, arranged by Bank of America Merrill Lynch, includes a $117.5 million asset-based revolving credit facility and a $50 million term loan, according to a statement. 

With this most recent distribution, WWRD has distributed approximately $66 million in cash to its stockholders in the last 15 months. All WWRD common stock is held by KPS, firm co-investors and company management. 

WWRD was formed to manage Waterford Wedgewood assets acquired by KPS in 2009. Those assets include home and lifestyle brands such as Waterford, Wedgewood, Royal Doulton, Royal Albert and Johnson Brothers.

Waterford Wedgewood had fallen into receivership prior to KPS’ acquisition in 2009 – the company’s debts exceeded $1 billion at the time of the deal. 

“I’ve spent 22 years – that’s half my life – immersed in turning around troubled or underperforming businesses. And I can tell you unequivocally: I have never seen a company that was as poorly run as Waterford Wedgwood,” KPS managing partner Mike Psaros told Private Equity International last year.  

“In many cases with a turnaround you have a marketing problem, or a strategic problem, or maybe a combination of both. This was a case where every single aspect of the business was broken.”

The firm implemented a series of operational improvements to spur production and alleviate costs including workforce reduction and consolidation, changes to manufacturing processes and a complete overhaul of the company’s supply and distribution networks. 

Those changes – along with others – cut costs by approximately $130 million. Furthermore, the firm managed to reduce the company’s debt burden from $1.1 billion to less than $50 million as of March, according to KPS. 

“A 257-year old enterprise went into bankruptcy, and nobody wanted to touch it. Now look at where it’s at today,” Psaros told Private Equity International in March. 

KPS manages approximately $2.5 billion in assets through its special situations family of funds. Psaros, David Shapiro and Eugene Keilan founded KPS in 1997. The firm maintains offices in New York and Frankfurt, Germany.